Published: 02 June 2017
The General Election 2017 – what this means for the retail industry
The retail industry is undergoing significant transformations as a result of a surge in technological advancement, increased competition and greater consumer demands, which in turn require higher levels of customer service. In order for businesses and consumers to thrive and meet these demands ultimately, there needs to be an increase in consumer confidence and stability.
However, stability is still not on the horizon as the UK starts its official Brexit approach after the triggering of Article 50. Uncertainty continues while the fate of the General Election and the identity of who will lead the country through the Brexit negotiations is to be decided. Whichever way the General Election falls, one thing that is for certain: the Government needs to put the consumer at the heart of its negotiations in order to keep prices low through securing tariff-free trade and guaranteeing the rights of EU nationals living and working within the UK retail industry.
The retail industry is key to generating economic growth and a key example of how the UK is driving productivity with increased jobs, innovation, technological advancement and investment. It is paramount that policies are negotiated to support a fair Brexit for consumers and ensure a pioneering and vibrant economy. To achieve this, the Government needs to tackle the following issues:
1. Business rates
– the taxation system is in desperate need of an overhaul as many shops are not able to renew their leases. They are facing high bills which do not necessarily reflect the demand for the retail space they occupy and, quite often, the business rates are higher than the actual rent paid forcing many smaller businesses to close. This taxation needs to be reduced to encourage business and growth, not hamper it.
2. Digital infrastructure
– technology is an integral element in today’s modern retail landscape as emergent digital technologies such as data analytics, robotics and virtual stores increase momentum. Investment in technology is critical to enable businesses to develop faster, increase skills and drive productivity and efficiency of the retail sector. The Government needs to continue its investment in digital infrastructure to underpin the UK’s position as a key player in an extremely competitive sector.
– around 400,000 EU citizens are employed by the UK retail, hotel and restaurant sector, making up nearly 8% of the work force. The next Government needs to negotiate deals to ensure these jobs are safe and working visa requirements are not put in place. The implementation of work permit for EU nationals could lead to an exodus of EU workers, leaving a costly and complex situation for retailers to manage.
The UK currently faces a challenging situation as retailers struggle with the impact of rising business rates coupled with an increasing National Living Wage and a weak pound. These issues combined leave little capital to invest and mean that some businesses are non-viable. The retail world will be waiting with baited breath over the coming weeks as they hope the next Government delivers a streamlined transitional plan to ensure continuity of existing EU legislation to support its economic growth and productivity.