In a significant industry collaboration, over 70 retail CEOs have penned a letter to the government calling for changes to business rates.
These include leaders from key beauty brands such as CEO of Sephora UK Sarah Boyd (pictured), Managing Director of A.S. Watson Health and Beauty UK, Peter Macnab and Chief Marketing officer at Fenwick, Mia Fenwick.
The letter aimed at Chancellor Rachel Reeves MP, planned and coordinated by the British Retail Consortium (BRC), calls for the introduction of a Retail Rates Corrector, proposing a 20% reduction in business rates for retail properties.
The beauty sector, a major player in the UK retail landscape, employs over 603,000 people in the UK.
In 2023, the beauty and personal care sector contributed £13.5 bn to the UK’s GDP, accounting for 0.5% of the nation’s total economic returns.
However, the call comes as the retail industry grapples with an inequitable tax burden, making retailers pay £33bn in business taxes, or 7.4% of all business taxes, which is 1.5 times more than their share of the GDP, 5% of the total economy.
The three million workers in the industry and the 2.7 million more workers in the supply chain are directly impacted by this tax burden, which discourages investment in people and places according to the BRC.
Helen Dickinson, Chief Executive of the BRC, emphasised the urgency of the reform.
“Retail has been the golden goose, generating tax revenues far beyond the industry's size, but the current situation is not sustainable,” she said.
“The government should act to rebalance the system and ensure all industries are paying their fair share.
"This, in turn, would drive increased retail investment in people, places, and communities.”
The CEOs who signed the letter pointed out the alarming figures that say more than 1,000 shops close each year. The research forecasts that without action, a further 17,000 shops could close over the next decade.
Signatures also include the CEOs of the main supermarket chains in the UK: Chief Financial Officer of Asda Michael Gleeson, CEO of Aldi, Giles Hurley, Tesco’s Matthew Barnes,Marks & Spencers (M&S) Stuart Matchin, and Sainsbury’s Simon Roberts.
This comes as supermarkets have broken into the beauty industry, making their stores the go-to for consumers looking for beauty products.
Third-party brands represent more than 40% of M&S Beauty’s sales, and Clinique is the supermarket's best brand.
Aldi’s Lacura brand, known for its efficient and reasonably priced dupes, also regularly goes viral on social media platforms.
As the autumn budget approaches, the retail sector is rallying for action. The letter culminated in a call for a more balanced tax system that will empower retailers to thrive in an increasingly competitive market, especially in the beauty sector.
The letter ended: “We believe now is the time to level the playing field between industries with a retail adjustment to rates, as this is the best way to achieve this manifesto commitment.”
“It would also drive investment across all parts of the country that you have rightly identified as critical to long-term growth.”