Last week Kwasi Kwanteng's so-called 'mini-budget' ushered in the biggest tax cuts since 1972. For shop owners, it means a reversal of the 1.25% National Insurance rise and freezing corporation tax at 19%.

Yet a reduction in business rates – which retailers have tried to win for years – remained off the table. According to the British Retail Consortium, the planned jump in rates next April will inflict another £800m in tax rises on stores.

Simply put, business rates are calculated based on shop floor size. Therefore, they penalise traditional retailers more than online competitors, like Amazon and other grocery delivery companies. These newer arrivals are retreating from territories and shedding staff as their higher-than-store prices turn consumers away.

This price gap may be narrowed as they benefit from Kwarteng’s measures and as high street retailers face a jump in rates.

If nothing changes, savvy retailers will be considering shrinking their shop floor ahead of April’s rates jump. This will inevitably come with a rationalisation of ranges that will tilt in favour of own-label products, which according to Lumina Intelligence are 49p cheaper than their branded counterparts. The only branded products that will survive are the ones that provide genuine value for shoppers.

Suppliers must act now to ensure retailers believe in their brands, through a communication plan that centres around the quality and profits your products offer. Suppliers must also underline the support they can offer retailers through the challenging times ahead.

Get in touch to find out how we can help ensure your brand remains on convenience shelves in 2023 and beyond.

Five key FMCG stories this month

  1. Talking Retail: Mini-budget slashes tax but leaves questions about business rates

  2. betterRetailing: Investments in convenience stores up by £71m in 2022

  3. Asian Trader: Chocolate, confectionery, ice cream at ‘high risk’ from inflationary pressure

  4. betterRetailing: Booker ramping up DRS support ahead of August 2023 implementation

  5. Convenience Store: Premier Singhs Teynham crowned Convenience Retailer of the Year 2022