Budget uncertainty is putting retailers at risk, the boss of Richer Sounds has warned.
Julie Abraham, chief executive of the hi-fi and TV retail chain, said unease has dragged on the retail sector during what should be its most buoyant time of the year.
Her remarks come just days before the Chancellor is expected to deliver a punishing series of tax hikes at her Budget on Wednesday.
Writing for the Daily Mail, Abraham – whose business has 51 stores and employs more than 500 staff in the UK – said shops’ investment plans have been put on ice while consumers have been discouraged from spending. It comes after policies in Rachel Reeves’ Budget last year ‘piled on immense pressure’.
Retailers were hit with £7billion in extra annual costs after Reeves shocked employers by announcing a hike on their National Insurance contributions. And firms have also bemoaned the late timing of this year’s Budget, which falls just days before Black Friday.
Abraham said: ‘Uncertainty makes it harder for retailers such as us to decide whether to refurbish a store, hire more colleagues or invest in new technology.
Making a noise: Richer Sounds boss Julie Abraham said unease has dragged on the retail sector during what should be its most buoyant time of the year
‘It affects confidence right through the chain – from the customer deciding whether to make a big purchase to the store manager weighing up next year’s costs.’
At this time of year, ‘consumer confidence should be at its strongest’ in the lead-up to Christmas, she added.
‘Yet instead, we’re left waiting to see whether new costs or changes will be announced that could upend months of planning,’ said Abraham.
She said she has been left in the dark as to whether proposals to reduce business rates for small shops ‘will be enough to make a meaningful difference’.
High Street stores are hoping they will see their bills reduced through reforms – which Reeves has said will be paid for through higher taxes on warehouses and offices.
Bleak figures from the Office for National Statistics last week revealed that retail sales fell 1.1 per cent month on month in October, marking the first drop since May.
And JD Sports said that sales of its trainers had been dented by ‘pressures on our core customer demographic, including rising unemployment levels’.
Meanwhile, fast fashion website Asos has said consumers were feeling ‘some level of uncertainty, because we don’t know what is going to happen with the Budget’.
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