FT - James Lowman, chairman, ACS

ACS chief executive James Lowman

The Association of Convenience Stores (ACS) has called on the chancellor to take decisive action in the budget on 15 March to help keep the UK’s local shops open through 2023.

In its submission to the Treasury ahead of the Budget, ACS has warned that the dramatically reduced energy support being provided to businesses from April this year is “ultimately pointless” if it is not targeted to the businesses that are most at risk of closure.

ACS has identified that those most in need of support will have agreed fixed contracts in the second half of 2022 at the height of wholesale prices, with some facing bills from April that are triple the cost of what they are now.

Taking action on energy costs is the most pressing priority in the budget due to the dire consequences of doing nothing said ACS. It has repeatedly warned the government that there are many convenience stores which simply cannot afford to absorb tens of thousands of pounds of additional costs on energy this year, with some likely to close their doors as a result.

ACS’s specific recommendations to the chancellor on supporting local shops through the energy crisis are:

  • increase the level of discount available under the Energy Bill Discount Scheme so businesses receive meaningful support to manage their energy costs;
  • better target discounts at the most vulnerable businesses that renegotiated their contracts when the wholesale energy prices were at their highest in 2022; and
  • put pressure on energy companies to allow the most vulnerable businesses to negotiate new contracts to better reflect lower wholesale prices.

ACS chief executive James Lowman said: “The energy support that convenience stores have had from government over the winter has been a lifeline. That lifeline is now being cut, leaving many wondering how they’re going to be able to keep their doors open from April. The chancellor must not attempt to play in the margins by pointing to other areas of government support as a way of making up for the ten-fold reduction in funding for hard-working businesses. He must address it directly and overhaul the energy package from April to make sure that those who need the most support get it.”

The budget submission also addresses other areas of concern for retailers where costs are going up, calling for a sensible approach to support retailers and consumers through this difficult trading period. Additional recommendations include:

  • Bring forward the Improvement relief from April 2024 and expand green reliefs;
  • look to introduce an alternative model for business rates to redress the imbalance between online and brick-and-mortar retail;
  • bring forward the review of employer national insurance contribution (NIC) thresholds;
  • recognise good quality employment and target regulation at employers using insecure and one-sided labour models;
  • invest funding in disrupting the illicit tobacco and e-cigarette market, which diverts trade from local shops and results in billions of lost tax receipts; and
  • freeze fuel duty to support retailers and customers during the cost-of-living crisis.

Lowman added: “There are a number of long-standing issues that the government has promised to address, but has not sufficiently acted on. Reform of the business rates system remains crucial to ensuring a fairer playing field for high street stores competing with online retailers, recognition of the secure and flexible employment that convenience stores provide will help with stores dealing with a challenging job market, and more funding to drive out the illicit trade in tobacco and e-cigarettes will not only support responsible retailers but also close the gap of billions lost by the Treasury in tax receipts every year.