Retail finance chiefs sound alarm over tax burden and inflation risks

A new survey from the British Retail Consortium (BRC) has revealed mounting concern among retail finance leaders, as fears grow that government policy is fuelling inflation, job losses, and reduced investment across the high street.

With the Chancellor preparing his next Budget, 56 percent of retail CFOs described their outlook for the coming year as “pessimistic,” while just 11 percent felt optimistic. The sentiment reflects deep anxiety over recent policy shifts, particularly sharp increases in National Insurance and the National Living Wage, which 85 percent of finance chiefs say have already forced them to raise prices.

The financial strain is being felt on the shop floor. According to the BRC poll, 42 percent of CFOs have frozen recruitment, while 38 percent have reduced headcount, a trend reflected in official figures showing nearly 100,000 fewer retail jobs in Q1 2025 than the year before. Community investment has slowed too, with 15 percent of retailers delaying new store openings.

Retail leaders are clear about the core issue: 88 percent of CFOs placed the growing “tax and regulatory burden” among their top three concerns, a sharp increase from just 62 percent at the start of the year. This includes business rates, National Insurance, wage hikes, and the new Extended Producer Responsibility (EPR) packaging tax.

Helen Dickinson, CEO of the BRC, called the last Budget a 7 billion pound blow to the retail sector, adding that further tax increases could "fan the flames of inflation" and weaken the high street even more.

“Retailers have done everything they can to shield customers,” Dickinson said. “But with slim margins and higher costs, price rises were inevitable—and now households are feeling the impact.”

Retail may account for just 5 percent of GDP, but it pays over 7% of business taxes and an outsized 21 percent of all business rates. With 5.7 million jobs across the sector and supply chain, industry leaders argue that meaningful reform—not further burden—is critical to maintaining retail’s role as an anchor of local economies.

As the Chancellor weighs his options, the message from retailers is clear: support the high street, or risk pushing prices and job losses even higher.