Retailers tell the chancellor to deliver as Shoppers are getting nervous just when retailers need them spending

Christmas warning as shoppers lose confidence and retailers demand action

Shoppers are getting nervous just when retailers need them spending

Christmas is approaching, but Britain's shoppers are becoming more cautious just when retailers need them to start spending. Consumer confidence in the economy fell in September for the first time after four months of improvement, expectations for retail spending weakened and households became gloomier about their own finances. For Britain's small shops, market traders and independent online retailers, the timing couldn't be much worse, and the BRC is telling the Chancellor that the Budget must avoid adding to the employment, energy and business-rates costs already squeezing the sector.

Consumer confidence fell in September for the first time in four months, and small and micro retailers are already feeling the chill, according to the latest figures from the British Retail Consortium (BRC).

With households preparing to cut back on discretionary spending, retailers are urging the Chancellor to tackle the “triple blow” of rising business rates, employment costs and energy bills before the downturn bites harder.

For small shops, market traders and independent e‑commerce sellers, confidence translates directly into footfall, basket size and survival. The figures are worrying in late September with retailers starting to think about shopping accelerating in the run up to Christmas.

Consumers Pulling Back

New figures from the BRC and Opinium, show that

• nearly half of consumers expect the economy to worsen,

• a third expect their personal finances to deteriorate and

• more shoppers plan to cut back on clothes and electronics, core categories for independents.

When confidence dips, small retailers lose out before the big chains do and those bigger businesses are in a better position to absorb slower sales than micro retailers are.

Unsustainable

Retail leaders warn that the Chancellor has three big issues to deal with:

Business rates

The BRC says the Chancellor must freeze the business rates multiplier to avoid “yet another burdensome tax increase”. For small retailers, rates are often the difference between staying open and shutting the doors.

Employment costs

Wage inflation, pension and National Insurance contributions and compliance costs are rising and micro retailers are the most exposed.

Energy bills

High energy prices continue to hammer shops, especially those with refrigeration, extended opening hours or older premises.

Growth is Stalling

The latest S&P Global PMI shows private‑sector growth slowing to a three‑month low, with the wider economy running at a “mere” 0.1% quarterly growth rate. Manufacturing is weakening, services are subdued and high costs and geopolitical uncertainty are discouraging hiring and investment. The OECD’s revised forecast this week was much more optimistic, predicting inflation to be lower than expected and UK growth to be higher for 2026 than expected. However, it seems that consumers and small retailers aren’t feeling it. Fewer customers, slower sales cycles, tighter cashflow and reduced confidence to invest or expand is the reality for many.

Reduce Costs

Retailers are telling the Chancellor that he must prioritise cost reduction to stabilise confidence and protect high streets. Small retailers need:

• a freeze to the business rates multiplier

• targeted relief for energy‑intensive shops

• measures to reduce employment costs

• policies that support consumer spending

• clarity and stability to rebuild confidence.

Decisive Action

Despite optimistic forecasts to the contrary, the BRC figures show that consumer confidence is slipping, costs are rising, and economic growth is weakening. Small and micro retailers, already operating on razor‑thin margins, need decisive action in the October Budget to prevent a confidence dip from becoming a high‑street crisis.