Retailers in Wales have called on ministers to avoid new cost pressures in the draft Welsh Budget due on Tuesday 14 October 2025, arguing that any increase in business rates wales would hit investment and prices at the till.
The Welsh Retail Consortium (WRC) says stores have faced a sharp rise in 2025 operating costs from labour, payroll and packaging rules, and wants the Finance Minister to guarantee that “no store pays more.”
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The appeal comes as the government develops proposals for differential non-domestic rates and continues a 40% relief scheme for eligible high street premises.
Business rates Wales: retailers seek certainty on draft measures
Ministers have consulted on introducing a lower multiplier for small and medium-sized shops, alongside a higher rate for larger properties — a move intended to rebalance the system but one that industry groups warn could create “winners and losers.”
The consultation highlights support for bricks-and-mortar stores facing online competition; however, retail bodies fear any surtax on medium and large units could deter investment in town centres.
The current Welsh retail, leisure and hospitality scheme provides a 40% discount on eligible non-domestic rates bills for 2025–26, capped per business. Retailers say that while this relief helps smaller shops, certainty on the overall multiplier and avoidance of extra burdens remain critical as trading conditions soften.
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By GlobalDataSara Jones, head of the WRC, said footfall remains weak and confidence fragile, adding that a meaningful rates cut would support jobs and prices.
She argued that a guarantee that no shop pays more would prevent cost shunting across the sector as differential multipliers are introduced.
Wider cost pressures: wages, national insurance and packaging taxes
Industry groups point to higher labour and compliance costs this year. The British Retail Consortium estimates UK policy changes added about £2.3bn to retailers’ costs from April 2025, including in Wales.
On packaging, the UK’s extended producer responsibility (EPR) regime began phasing in this autumn, with fees expected to land on producers to fund household packaging waste management; businesses also face an increased Plastic Packaging Tax rate from April 2025.
Retailers argue these measures risk feeding through to consumer prices unless offset elsewhere in the Welsh Budget.
Jones said that piling additional costs on stores would ultimately be borne by households. She called for ministers to pause “heavy-handed” regulatory plans where possible and to rule out any rise in the Welsh Rate of Income Tax that could reduce shoppers’ disposable income.
What happens next for the Welsh government budget and the high street
The Senedd is due to receive the draft budget, after which proposals on non-domestic rates Wales will move through scrutiny and any subsequent legislation.
Business groups, including the WRC and small-firm representatives, want the final package to prioritise high streets by keeping business rates stable or lower, maintaining targeted relief and ensuring medium-sized and large stores are not penalised by a higher multiplier.
Jones said the government has an opportunity to stabilise retail costs and confidence. Her message: provide clarity on business rates wales, avoid new fiscal pressures, and support demand so that shops can keep prices competitive while protecting jobs.
