A recent survey conducted by restructuring specialist FRP Advisory has revealed growing concerns among UK retailers about the survival of their businesses due to the end of energy subsidies. The survey gathered responses from over 50 retail groups in the UK and found that many retailers fear they may not be able to survive the next year as they face a significant increase in costs once government assistance with energy bills is discontinued from April.
According to the survey, 22% of the 250 retailers surveyed expressed a lack of confidence in their ability to remain solvent by the end of next year. The majority of the businesses, around 60%, cited rising energy costs as their biggest cost pressure in the coming months.
The government has decided to scale back its support for businesses’ energy bills, as it deemed the previous scheme too expensive. Starting in April, companies will transition to a new scheme that offers them a discount on wholesale energy prices instead of a cap. However, this transition is expected to cost taxpayers approximately £5.5 billion in energy subsidies for companies. The decision to implement this change came after Chancellor Jeremy Hunt referred to the old scheme as “unsustainably expensive,” with estimates suggesting costs could reach £18.4 billion in just six months.
Commenting on the survey results, Phil Reynolds, a spokesperson for FRP Advisory, stated that “Inflation is driving up operating costs and dampening consumer confidence, and the looming recession is likely to ensure that conditions remain challenging for some time.”
Further supporting the concerns raised by retailers, the Centre for Retail Research has released findings that show a significant number of retail jobs have been lost since January. The research estimates that nearly 15,000 retail jobs have been lost, making for a “brutal” start to the year. The job losses mainly result from large retailers implementing cost-cutting measures and undergoing insolvency proceedings.
These survey results and research findings highlight the increasing pressures faced by retailers in the UK. Rising energy costs, combined with other challenges such as inflation, consumer confidence, and an impending recession, are creating a difficult environment for businesses. As the government scales back support for energy bills, retailers will need to find ways to navigate these challenges and ensure their survival in an increasingly competitive market.
For more information on the survey conducted by FRP Advisory and its findings, you can visit their official website [Link 1]. To access the research conducted by the Centre for Retail Research on retail job losses, you can click here [Link 2].
Links:
[Link 1](https://www.frpadvisory.com/)
[Link 2](https://www.retailresearch.org/)
