In his speech to the CBI annual conference, Dave Lewis (Chief Executive Officer of Tesco) today called for “the industry and Government to sit down at the highest level and consult on the multiple policy changes that are affecting the industry”. Outlining the “remarkable” contribution made by the retail industry to the UK economy in terms of impact on GDP, employment, training and the wider community, Mr Lewis warned of risks from “the addition of more structural cost at a time of historically low profitability” for the industry. Frontier (Europe) has been working with Tesco to understand what the policy reforms mean for its business and the wider retail industry.
As big employers, and big users of property, the retail industry has been disproportionately hit by recent tax changes. The National Living Wage will have a considerable impact on retail businesses, the largest sector of employment in the UK. The Apprenticeship Levy also represents a new payroll tax that will affect the industry. In his speech, Dave Lewis pointed out how these reforms come on top of changes to Sunday trading regulation and the continued impact of business rates – Tesco’s business rates bill has increased by over 35% in the last 5 years, even as property values and profits in the retail sector have fallen. Mr Lewis called for urgent reform as part of HM Treasury’s business rates consultation.
Frontier (Europe) advises Tesco, and other multi-channel retailers, on government policy, economics and strategy.
For more information, please contact Goran Serdarevic on [email protected], or call +44 (0)20 7031 7000.