Ever‑Slightly‑Bleak Outlook: CFOs Feel the Ground Shaking
When 52 top‑tier retailers asked their CFOs to put a number on how they expect the next year to stack up, the result sounded eerily like a storm‑clouded forecast: an overall sentiment of –57 – yes, it’s a negative glow that couldn’t be brighter.
What’s Got These Money‑Minded Managers Feeling Down?
- 70% came out “pessimistic” or “very pessimistic” about the next 12 months.
13% felt “optimistic” or “very optimistic”, while the remaining 17% stayed neutral. - Below are the three top worries that pop up in more than 60% of the CFOs’ lists:
- Demand for goods and services slipping like a tide‑pulling wave.
- Stubborn inflation still greasing the shopping cart.
- Tax and regulation walking in like a ring‑tailed dictator.
When the New National Insurance Contributions (NICs) Rise, What’s the Game Plan?
Two‑thirds (67%) of the CFOs said they’ll simply raise prices.
About half are cutting their \”wig‑runs\” to save costs:
- Cutting over‑time hours – 56%.
- Slimming down head‑office staff – 52%.
- Focusing light on store teams – 46%.
And one finger‑pointing to the future: almost a third (31%) think the extra spend will push technology into the spotlight, turning automation from a buzzword into a lifesaver.
Long story short: CFOs aren’t exactly relying on rain‑bows, but they’re strategizing hard to keep their carts full in the twisted journey ahead.
Fears of stagflation persist despite ‘temporary’ inflation drop
CBI expects ‘inflation will stay elevated this year’ as the Budget is forcing prices higher
Budget Shockwaves: Retail CFOs Hang On Tight
The UK Budget isn’t just numbers on paper—it’s a spring-loaded grenade for shop owners. A recent poll revealed that 46% of CFOs plan to cut back on capital, and 25% will stall new store openings. Even if you thought that “profit” was a mythical creature, 44% of respondents expect earnings to dip, which shrinks the purse‑strings even further.
Letter to the Chancellor: Retail’s Cry‑Out
Three weeks earlier, a letter signed by 81 retail CEOs hit the Chancellor’s desk. The draft warned that the industry could cost an extra £7 billion in 2025, split as follows:
- Employer National Insurance Contributions (NICs): £2.33 billion
- National Living Wage hikes: £2.73 billion
- Revised packaging levy: £2 billion
Beyond the Budget: The Soup’s Still Not Hot
Chill is almost as dangerous as a price hike. Retailers are battling weak consumer confidence and a slow‑moving demand pulse. CFOs anticipate price inflation to climb from the current 0.5% to around 2.2% by late 2025. Food is the hot‑spot—expect inflation to hit 4.2%.
Sales growth looks like a toddler on a wobbly bike: a modest 1.2% increase versus the prior year’s 0.7%. That’s still below inflation, meaning volumes might fall while overhead costs rise—an economic nightmare in a nutshell.
CEO Perspective: “It’s a Tight Spot”
Helen Dickinson, BRC chief executive, warns that the added £7bn per year will force retailers into grim decisions about investment, staffing and pricing. The biggest hits come from changes to the NI threshold, impacting the 5.7 million gig and seasonal workers that keep high streets humming.
Retailers have tried hard to shield shoppers, but when growth sails low and margins skimp thin, the only real choice left is to lift prices—especially for groceries. Food inflation won’t flatten out anytime soon, which could put a dent into local economies and job prospects.
The government could still dip its toes into the problem. Business rates pose the biggest hurdle, with retailers shouldering over 20% of the total bill. Confirming reforms that genuinely relieve the burden is essential, or risks turning every shop into a cost tower.
Bottom Line
Between the new costs, sluggish demand and the looming threat of price increases, the retail landscape is freaking out. It’s a high‑stakes game of finishing the fiscal year without closing a single store. The next steps will determine whether the retail scene fizzles or survives the budget surge.
