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Chancellor ramps up Sunday competition for independents

Published: 8 July 2015
Unveiling his Budget today, Chancellor George Osborne delivered what could turn out to be a damaging blow to independent retailers.
Chancellor ramps up Sunday competition for independents
Rules restricting the opening hours of large shops in England and Wales on Sundays are to be relaxed, and towns and cities will now be allowed to decide for themselves how long their local shops can stay open.

Currently, smaller shops are permitted to trade all day, but those over 3,000sq ft can only open for six hours. Now though, independents will face stronger competition on Sundays.

One observer who believes indies will probably lose out is Phil Mullis, head of retail and wholesale at top accountancy firm Wilkins Kennedy.

"The trading hours could create a U-turn in shopper behaviour as consumers choose to shop for longer at the larger stores," he said.

"The truth is, consumers can only consume so much - will we spend more because the stores are open for longer? It's unlikely, but the chances are the independent stores will stand to lose out in the longer term."

But elsewhere the move has been welcomed. Said British Property Federation chief executive Melanie Leech: "The way we shop has changed beyond all recognition in recent years and government has struck the right balance between being alive to that and ensuring any further liberalisation of shopping hours is well managed.

"Longer hours will not suit all places, but equally should not hold other places back. Devolving the decision to a local level and those who know what will be best for their area, in this instance, therefore makes perfect sense."

And Nik Wheeler, planning associate director at property consultancy GL Hearn, commented: "This is a positive relaxation of dated regulations. Greater flexibility for larger stores will raise extra income for retailers, create more jobs and provide greater convenience for those who are unable to shop during weekdays.

"Relaxed Sunday trading laws were introduced successfully during the London Olympics in 2012 and will help bricks-and-mortar stores to compete better with online retailers."

But he added: "In order to avoid confusion for people shopping across council boundaries, all local authorities should take up the option of extended hours and coordinate these regionally."

At Visa Europe, UK & Ireland managing director Kevin Jenkins said that more than 20 years after the Sunday Trading Act was introduced, it was clear that consumer appetite to shop on a Sunday continued to grow.

"According to our card transaction data, face-to-face spending on a Sunday has grown 35% in the past five years - significantly higher than any other day of the week.

"While growth rates for face-to-face Sunday shopping continue to outstrip Saturday, spend on the second day of the weekend is still around half that of the first. Looking online, the split between the two days is far more even, suggesting extended opening hours on a Sunday could allow retailers to tap into consumer demand to shop, as well as use services such as click and collect, across the weekend."

Retail consultancy CF Commercial applauded the Chancellor's announcement, but warned that major business rates reform was needed to stop small independents going out of business.

Director Craig Fisher said: "Moves to reform Sunday trading laws should be welcomed by retailers and consumers alike. But a more pressing concern, especially for London retailers, is following through with the radical reform of business rates, which are the second greatest cost to businesses after rent. Come [the business rates revaluation in] 2017, there is a real threat to small independents in the capital."

Mr Osborne also announced the introduction of a compulsory Living Wage to replace the minimum wage, which is now £6.50 an hour. Applying to workers over 25, it will come in at £7.20 an hour next April and rise to £9 by 2020.

Corporation tax will also be cut to 19% in 2017 and 18% in 2020, and the National Insurance employment allowance for small firms will be increased by 50% to £3,000 from next year.

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