Wednesday 21 March 2012
The temporary relaxation to Sunday trading laws risks presenting more challenges than opportunities to businesses during the Olympics, says Helen Dickinson, Head of UK Retail at KPMG. Instead changes to tackle business rate rises for retailers and encourage increased consumer spending are needed. She commented:
“The Chancellor’s decision to suspend restrictions on opening hours for retailers for the two month period surrounding the Olympics will be welcome to Olympics’ tourists, but unfortunately does little to tackle the wider problems facing the sector. Consumer confidence is weak and retailers needed the Government to put more money in people’s pockets to get them spending on a daily basis and sadly this Budget did not achieve it. Whilst the increase of the basic rate of personal allowance to £9,205 is welcome, it will not take place until next year and so offers little help to retailers struggling to maintain sales volume over the next twelve months.
“News that the August fuel rise will go ahead is also demoralizing news for the sector. Rising fuel costs hit retailers twofold by increasing business running costs and putting further pressure on consumers’ household budgets, reducing their disposable income further.
“The relaxation of the Sunday trading laws applies to those larger retailers with floor space of more than 3,000 sq ft who are currently restricted to trading to six hours on a Sunday. For these businesses the ability to trade for longer brings the possibility of more customers but with this also the prospect of increased overheads and staffing issues and many will not welcome the new expectation put upon them that they will be open for longer during the Games.
“Retailers in London are concerned about the other challenges the Olympics will bring. There is ongoing debate among them as to which sectors will be the winners and losers in terms of spending. Net, net, I expect the impact on retail spending in the capital to be neutral at best. However, increased traffic and road closures will make the distribution of goods to stores increasingly challenging for all retailers and many are concerned that they will not be able to maintain good stock levels over the Olympic period. This challenge is already present and will simply be exacerbated by extending current trading hours.
“What retailers really wanted was immediate action that would help consumers and help them manage their costs, such as relief on business rates. This was notably absent today. Most retailers have extensive property portfolios and thus are particularly exposed to increases to business rates. Reform is needed to make the rates more predictable and fairer.
“Overall whilst retailers may recognise that the Chancellor has attempted to address their needs, I doubt that many are jumping for joy after listening to today’s statement.”
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KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.