Of all the sectors to come unstuck in the last year, COVID-19 hammered another nail into the coffin of struggling retail businesses. That got us talking about what ‘good’ actually looks like for retailers in 2021.
Firstly, it must look an awful lot better than 2020. Last year was the worst year on record for UK retailers, with the three lockdowns costing non-food retailers a combined £22 billion in lost sales. It surely cannot get any worse.
We’ve also got a Budget coming up next week, in which Chancellor Rishi Sunak is likely to announce some form of tax relief or further support to help fuel a recovery in the retail sector.
Retailers who are faring well during the pandemic are those who have a user-friendly website, which is fully optimised for ecommerce, enabling them to sell while their bricks-and-mortar store is shut.
That’s an invaluable source of income in times like these, when state support measures – either in the form of tax breaks or grants – are the only thing many shop owners have to rely on. What would ‘good’ look like to them?
Business rates is one of the key factors that has expedited the decline of the high street, with the current system skewed against the retail and hospitality sectors.
In last year’s Budget, a year-long business rates holiday was announced for the retail, leisure and hospitality sectors. This is due to expire on 31 March 2021.
Retailers would welcome another extension to business rates relief in the Spring Budget on 3 March 2021, giving them a fighting chance to continue trading, employing staff and serving their communities.
Sunak was due to announce the findings of a report into business rates in England in a scheduled Budget last autumn. Coronavirus put paid to that, but it would be good for retailers to see a longer-term plan on this.
Most retailers who operate out of a shop or store pay rent to a commercial landlord to occupy that premises. With restrictions in place for most of the last 12 months, rental debts could easily be stacking up.
Protection is in place until 31 March 2021 to prevent commercial landlords from evicting retail business owners who are being affected by these ongoing restrictions and therefore unable to trade.
Extending this moratorium on debt enforcement beyond the end of next month would be good news for thousands of retailers, many of whom face accumulating rents.
Since March 2020, the furlough scheme has enabled more than a million employers to make significant savings on wages. Extending this scheme seems likely in the Spring Budget, and would be welcomed by retailers.
The British Retail Consortium would like to see Sunak go a step further than this, though.
It wants the Chancellor to reverse EU state aid limits from affecting lockdown grant applications. This would enable the hardest-hit retailers to receive more emergency funds in any successful lockdown grants.
We believe there’s light at the end of the tunnel for retailers in 2021 and even if a few of these measures come in, it would be good for businesses in this sector. Feel free to get in touch with us to discuss your retail business.