Retailers have warned that the Budget leaves them with no breathing room on costs, pointing to a further £2 billion in employment costs on top of £6.5 billion added over the past two years, a period in which the sector has already lost more than 120,000 jobs.

Where the extra costs come from

The British Retail Consortium (BRC) said the Chancellor's headline promise to freeze business rates in real terms in fact means a 3.5% increase, adding around £250 million to retailers' bills next April, even though 70,000 small high street businesses will no longer pay rates at all.

What retailers say it means for jobs

The BRC said a rise in the National Living Wage, combined with no cut to employer National Insurance, would add the extra £2 billion to employment costs. It also warned electricity costs would rise £440 million this year.

Retail faces £41 billion in business taxes this year, according to the BRC, and one in seven shops now lies empty. Separate BRC-commissioned analysis put retailers' 2025/26 business taxes at £39.1 billion, an effective rate of 71.5%, the highest of 11 sectors analysed.

The BRC argues that rising employment costs have limited retailers' ability to create jobs, with 122,000 retail jobs lost between the second quarters of 2024 and 2026, even as it pledged 100,000 jobs for young people not in education, employment or training. The sector employs around 2.8 million people.

The trade body is calling for a tax-free shopping scheme, practical VAT rules for online marketplaces, and action on business rates. Its chief executive, Helen Dickinson, said the Government cannot keep talking about reviving high streets while failing to address rising costs.

Sources: The Retail Bulletin and TheIndustry.fashion. All sector figures are as reported by the BRC and its commissioned analysis, not independently verified by DailyByte.