Stephen Springham, partner, retail research at Knight Frank, said: “Another inevitable margin squeeze for retail and hospitality operators in shape of an increase in the national living wage (+4.1% to £12.71). Further divisions in a three-tier market within business rates, the promised exemptions reneged upon in the highest (>£500k RV) bracket. A half-baked plan to phase out de minimis rules from 2029, rather than a decisive move with immediate effect.
“There were very few positives for the retail sector in today’s Budget. Pitched as a boost to the retail sector, increases in the minimum wage are actually a major cost headache for retail and hospitality operators. Since it was launched in 2012, the living wage has risen by +105%. In contrast, retail sales have grown by just +60% over the same period. The net result of operating costs growing at a faster rate than sales is a margin squeeze, with inflation an inevitable pressure-relieving valve.”
Simon Berkley, partner, business rates at Knight Frank comments:
“The Government has substantially cut the Business Rates multiplier, applied to Rateable Values, from a current rate of £0.555 to £0.480, effective from April 2026. This has been made possible by a national revaluation of all properties, which has resulted in a large overall increase in most sectors. Even with the reduced multipliers, only 23% of businesses will see their rates bills go down.
“The biggest winner, as expected, is the high street with new permanently lower multipliers for retail, leisure and hospitality properties with a Rateable Value below £500,000. However, the Government has not exempted retailers from the new levy on large properties. This will have a direct impact on supermarkets who had been lobbying for a reprieve.”
