Indie retail sector showing growth
Posted on in Business News
Independent retail is growing, however Bira warns independents need to be prepared for further cost challenges.
Independent retailers are said to have grown by an average of 2.35% in the second quarter of 2015, according to a report by the British Independent Retailers Association (bira).
Retailer anxiety is now at its lowest level since the beginning of 2014 as seven out of ten respondents are either confident or very confident of the year ahead.
Bira deputy CEO Michael Weedon warns that independents must remain in this positive mindset as growth will need to run well ahead of inflation, given the cost challenges independents face.
He comments "Independents have already had to deal with a business rate increase of 2% and unless the Chancellor repeats his discount of £1,500 next year, will see huge further increases.
The National Minimum Wage (NMW) rises by an inflation busting 3% in October before the new National Living Wage (NLW) arrives in April adding a further 7.4% on top of the October increase. Then they will really have to build turnover year after year just to keep in touch with government driven rates as the target of £9 per hour by 2020 calls for four annual increases of 6% - and the NMW can be expected to follow that growth trend. That will be on top of the new requirement on all employers to pay an additional 3% in pension contributions as all of the small businesses meet their staging dates between now and 2017.
In the light of those prospects growth of just over 2% looks like a very bare minimum and if the expected rise in interest rates occurs in early 2016 retailers could find life very difficult indeed as eight million variable rate mortgage payers have to divert cash from spending to keeping the roofs over their heads."