Customers and struggling households will bear the brunt if convenience retailers are forced to raise prices again following the UK Budget, the Scottish Grocers’ Federation has warned.
This Wednesday (26 Nov), the UK Chancellor of the Exchequer is expected to announce a range of new taxes to close the gap in the public expenses.
However, the convenience retail sector is already among the most impacted by changes announced in last year’s budget. Increases to employer NI contributions and the National Living Wage, higher costs associated with new workers’ rights, and a range of product restrictions implemented through 2025 and 2026, means that retailers have had no choice but to cut staff hours, raise prices and reduce investment in business improvements.
Annual figures on the Scottish convenience sector published in October highlighted a reduction in local lifeline services and a staggering 10 per cent drop in staff over the year. The number of people employed by the sector has fallen by 6,000 to 49,000. Reducing the overall hours worked by colleagues from 9.8m in 2024, down to 9.5m.
At a time when costly burdens such as the surge in retail crime, higher than normal food inflation and interest rates, and a real terms decline in business rates reliefs have also resulted in retailers investing less back into their stores, down from £94m to £89m in 2025.
“There’s no point beating around the bush,” said SGF Head of Policy & Public Affairs, Luke McGarty, “it is absolutely critical that the Chancellor does not add further to the cost of business for retailers in her announcements this week.
“Everyone agrees that we desperately need to encourage more economic growth, and convenience retail is both the backbone of the UK economy and at the heart of local communities. Providing an essential local economic multiplier for other businesses, vital local employment, and lifeline local services.
“The announcements in last year’s budget hit our sector particularly hard. On top of coping with the cost of retail crime, and a growing number of tighter product restrictions and bans, retailers simply can’t absorb another damaging blow. The result will be even higher prices for customers and struggling household budgets.”
As a result of last year’s UK Budget, employer National Insurance contributions have shot up to £396m, an increase of £175m on the previous year (UK wide). With year-on-year hikes to the National Living Wage increasing by 33 per cent since 2019 (from £8.21 to £12.21 per hour).
