UK Shop Closures to Increase Following Budget Tax Changes
LONDON (Reuters) - Britain's high streets will likely see an acceleration in closures this year as extra costs imposed on businesses by the government's first budget take their toll, according to a report from advisory firm PwC.
Finance Minister Rachel Reeves' October budget increased employer taxes to raise money for investment in infrastructure and public services, prompting criticism from the business community.
The PwC report, using research from Green Street, showed a total of 12,804 shops and outlets belonging to multiples and chains (those with five or more outlets) exited UK high streets, shopping centres and retail parks in 2024. After taking account of openings, net closures per day were 10, three less than 2023.
"In the short term, higher costs following April’s increases in National Living Wage, employer National Insurance contributions and business rates mean we're likely to see an acceleration in closures as marginal locations become unviable for retail and hospitality operators," PwC said.
Trade body, the British Retail Consortium, which represents most of the UK's biggest retailers, has previously warned the extra budget costs will make higher prices and job losses a certainty and dent investment.
The new Labour government said the budget measures were needed to fill a 22 billion pound ($28.5 billion) "black hole" it inherited from the previous Conservative administration. It has said difficult choices had to be made to restore economic stability.
PwC said that while the 2024 data reinforced a continued move away from the high street, out-of-town locations saw fewer closures and a net increase in store openings.
That was driven by both leisure outlets and larger retailers shifting from high streets to retail parks because of the greater convenience these locations offer consumers.
($1 = 0.7722 pounds)
(Reporting by James Davey; Editing by Sharon Singleton)
