Chancellor’s summer statement fails to address the core problems for retail

Following the series of measures announced by the Chancellor of the Exchequer to aid economic recovery, Thomas Brereton, Retail Analyst at GlobalData, a leading data and analytics company, offers his view:

“Retailers will undoubtedly be feeling left out from the Chancellor’s statement earlier today. While some comparable sectors received lifelines (e.g. the “Eat out to help out” voucher and discount scheme for the hospitality sector), no such initiative has been announced for retail directly. This will be particularly unnerving for non-food physical retail operators, a market which is expected to be £34.8bn worse off in 2020 compared to 2019.

“Certainly, there will be a few positive side-effects for retail from the announcements. The “Eat out to help out” hospitality scheme will assist high street and shopping centre locations by generating additional footfall; and the temporary reduction in stamp duty will help furniture and homewares retailers a little. But few of the measures outlined address the core issue for non-essential retail – crippled consumer confidence. GlobalData Retail’s consumer confidence tracker (which asks about expectations of personal finances and the economy over the next six months) saw the period April to June record the lowest three-month average since the tracker began in 2012*.

“The restoration of confidence is not a straightforward task, requiring greater perceived stability across multiple macroeconomic issues. But in the meantime, the Chancellor must urgently reconsider providing greater relief for retailers, through some combination of lower business rates, VAT rate reductions, discount stimulus packages and prolonged assistance with furloughed staff.”

*Monthly survey of 2,000 UK respondents, undertaken at the start of June.

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