Retailer survey shows fears for survival over end of energy subsidies
Pressure from rising energy costs is cited as a major danger to the future of retailers, according to a survey of more than 50 UK retail groups by restructuring specialist FRP Advisory.
Fears are rising that many may not survive the next 12 months because they face a sharp rise in costs when government help with energy bills is withdrawn from April.
The survey of 250 retailers with at least 100 staff, showed 22% were not confident they would be solvent by the end of next year. Some 60% of the businesses also cited rising energy costs as the biggest cost pressure in the months ahead.
The government is set to scale back its support for businesses’ energy bills after it concluded that the scheme was too expensive. Companies will move to a new scheme from April, which will hand them a discount on wholesale energy prices instead of a cap.
Under the new scheme, taxpayers will provide energy subsidies of about £5.5 billion to companies. The programme was put in place after chancellor Jeremy Hunt described the old scheme as “unsustainably expensive”, with estimates suggesting that its costs could hit £18.4 billion in just six months.
FRP spokesman Phil Reynolds said: “Inflation is pushing up operating costs and dampening consumer confidence, with the looming recession likely to ensure that conditions remain challenging for some time to come.”
The Centre for Retail Research has estimated that nearly 15,000 retail jobs have been cut since January during a “brutal” start to the year. Its research looks at job losses at large retailers pushing through cost-cutting programmes, as well as retailers undergoing insolvency proceedings.
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