What retailers would like to see from the Labour government

In the wake of Labour’s landslide election victory, Daniel Wood and Zoe Wakeham, Consultants in our Consumer & Retail practice, explore the implications of political change for the retail industry.

On 5 July, the day on which Sir Keir Starmer was appointed Prime Minister following Labour’s resounding election victory, the British Retail Consortium released a short statement congratulating him on his success while also making the point that it was time for retail and the new Labour government to get down to business. In its statement, BRC noted some crucial commitments for retail that appeared in Labour’s election manifesto, from reforming business rates, planning and the apprenticeship levy, to introducing a specific offence for assaulting a retail worker.

Reform of business rates is the biggest issue of all for bricks and mortar retailers. “Labour recognised that the business rates system is broken,” said BRC Chief Executive Helen Dickinson. “With retail paying 22% of the total rates bill while accounting for 5% of the economy, it is the number one thing in the way of increased retail investment which could unlock growth across the economy. So we look forward to further engagement on the details as the work starts here in turning commitments into delivery.”

Clearly, time will tell what flesh is put on the bones of these manifesto pledges. But there are other indicators that paint a picture of what the new government hopes to achieve.

In April, Labour published a five-point plan for revitalising the high street. Business rates reform is, hardly a surprise, one of the five points. The four others are: tackling anti-social behaviour and shoplifting; banking hubs to provide communities with face-to-face banking services; a clampdown on late payments to help independent retailers with their cashflow and financial stability; empowering communities with the right to buy and redevelop vacant shops, pubs and community spaces.

These are big and challenging goals – and nobody is expecting significant change to materialise overnight. Yet the hope must be that a fresh, coordinated approach to revitalising the high street can deliver positive results, in everybody’s best interest.

Nationally, the high street vacancy rate has remained at around 14% in recent years (with shopping centre vacancies at 17-18%), although of course some high streets are far harder hit than others, saddled with a high proportion of shuttered, empty units which discourage shoppers from visiting. Turning the tide here is imperative.   

Amid the major challenges there are also positive stories to celebrate, such as beauty retailer Sephora’s return to physical stores in the UK after 17 years, with the opening of a unit in Westfield London last year – followed this year by the opening of a store in Manchester’s Trafford Centre and more new locations to come.

Some prominent retail CEOs have made it clear what they would like to see from the government. Card Factory CEO Darcy Willson-Rymer has called for greater forward visibility on plans in key areas such as living wage and taxation to help “plan how we navigate that and we can also plan where our investments need to go.” Co-op managing director Matt Hood asks the new government “to bring focus to the opportunities, including apprenticeships, available for our young people, to give them the chance to thrive and develop exciting and enduring career prospects.” While Majestic Wine CEO John Colley calls for an urgent review of the proposed new “unnecessarily bureaucratic” alcohol excise duty regime.  

Hopefully, the new government will bring some certainty as it hits its stride, allowing  businesses to move forward with projects and investment. We at Odgers Interim are expecting an increase in activity as the year progresses. To discuss interim management opportunities in retail, contact Zoe and Dan.