UK Budget 2021: What is the future for the retail industry?
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UK Budget 2021: What is the future for the retail industry?

By Jessica Paige 04 Mar 2021

UK Chancellor Rishi Sunak yesterday announced a series of measures that that will affect the retail industry as part of the UK 2021 Budget. Experts respond.

UK Budget 2021: What is the future for the retail industry?
Conservative chancellor Rishi Sunak. Credit: Reuters

UK Chancellor Rishi Sunak yesterday announced a series of measures that that will affect the retail industry as part of the UK 2021 Budget.

Sunak announced an extension of business rates holiday for “hard hit” England-based firms until the end of June, which will then be followed by a 75% discount.

He also announced an investment of £5bn in “restart” grants for shops and other England-based businesses that were forced to close amid the Covid-19 caused lockdown. This grant will help businesses reopen after lockdown.

Sunak added that the furlough scheme would be extended until the end of September, with employees continuing to receive 80% of their salary.

Sunak said: “As businesses reopen, we’ll ask them to contribute alongside the taxpayer to the cost of paying their employees. Nothing will change until July, when we will ask for a small contribution of just 10% and 20% in August and September.”

“Money would have been better invested in [retail] digitalisation”

London-based mobile marketing agency ConsultMyApp CEO Mike Rhodes told Retail Insight Network that the money being put towards the restart grants would have been better invested in digitalising brick-and-mortar retailers.

Rhodes said:” Sadly, today’s Budget shows that our leaders are not willing to go the hard yards in ensuring our economy bounces back from the drastic effects of the Covid-19 pandemic. Whilst today’s statement pays lip-service to a number of sectors, ultimately the government’s latest policies will fail to prepare British industries for the difficult future ahead.

“Grants to help retailers bounce back and revive the high-street for instance, may go a short-way in securing and protecting jobs, but the money would have been better invested into their digitalisation.

“High-street retailers need to be given grants that will allow them to digitise, build websites, market apps and ultimately appeal towards the now fully-digital consumer.

“By failing to help retail, hospitality and construction industries to digitise and evolve for the future, we’re holding them back from galvanizing on the opportunities that many other industries, such as Gaming, FinTechs and Leisure businesses are reaping the benefits from.

“With that said, this government’s investment in Britain’s young workers and traineeship schemes is greatly encouraging. As a CEO in a booming-tech industry, the prospect of bringing on eager young talent is something we’re greatly looking forward to!

“Going forward, the government needs to prioritise making our SMEs innovate for the future! The UK has long been a world-leading tech hub, but this now needs to be backed with noticeable action that can help businesses evolve for the digital-based future.”

“[The grant] doesn’t address the shift in consumer behaviour”

Retail expert and Go Instore Co-CEO and Co-founder Andre Hordagoda also told Retail Insight Network that the grants being offered to high street retailers does not address how consumer behaviours have shifted as a result of the pandemic.

Hordagoda said: “The Chancellor has announced that retail businesses will be eligible for grants of up to £6,000 to help them kick-start trading when non-essential retail can reopen. While this is great news for bricks-and-mortar retail, it doesn’t address the shift in consumer behaviour as a result of the pandemic.

“In the UK, 46 percent of consumers have purchased a product online that they had only ever bought in person previously. To add to this, only some customers are excited about the prospect of in-store retail opening its doors again as almost half of customers suggest they won’t return to pre-Covid levels of in-store shopping.

“Retailers need to react to these changes in shopping behaviours and make moves to support themselves with an omnichannel strategy. By incorporating live-video into their strategy, retailers can connect with customers via in-store experts to deliver the personalised experiences that in-store customers get, combatting the traditional divide between online and in-store.

“With omnichannel retailers seeing a 99.8% year-on-year increase in sales across all channels compared to online-only stores at only 31.2%, it is clear that an omnichannel strategy can seriously benefit both retailer and consumer.

“Using these grants to connect the online and in-store worlds will allow customers to engage with both methods, and allow retailers to reopen successfully without compromising in the digital space.”