Retailers are warning of significant challenges ahead for the industry in Wales if the Senedd proceeds with plans to levy a business rates surtax on medium-sized and larger stores.
The proposals, which would see larger stores face an additional business rate surcharge, have sparked serious concern among retailers who fear the changes could place Welsh businesses at a competitive disadvantage.
The Welsh Government’s own estimates suggest that at least 970 shops across Wales could face a substantial increase in their rates bills under the new system.
The Welsh Retail Consortium says this would be a “blow that would come on top of mounting cost pressures from government-mandated hikes to the cost of employing people, new packaging requirements, rising energy prices, and tightening consumer spending”.
While praising plans to trim rates for small stores, retailers argue that the cumulative effect of broader pressures coupled with the surtax threatens the sustainability of high street stores and shopping centres, undermining both local employment and community vitality at a time when town centres are already under strain.
Sara Jones, Head of the Welsh Retail Consortium, said:
“Welsh Ministers have made headway on aspects of the business rates agenda in recent years, notably introducing more regular revaluations. However, the Welsh business rate is the highest in GB and has risen to a 26-year high, at a time when retailers are facing challenging trading conditions whilst being thwacked by a range of other statutory costs.
“The plan to reduce rates for the smallest shops is encouraging, but a high proportion of retailers operate from medium-sized and larger premises and are threatened with a new business rate surtax. These medium sized and larger stores help underpin the health and vitality of our town and city centres and high streets across Wales and account for a large share of retail jobs, and the surtax could see them pay even more than their counterparts occupying equivalent stores in England. It is imperative MSs act and ensure no shop pays a surtax and ideally that a commensurate rates reduction applies to medium-sized and larger stores too. It’s not in the interests of the Welsh economy for retailers to be incentivised to invest in Cheltenham over Cardiff.”
