This creates evidence to allow both the CBI and our members to continue the conversation with policymakers about how to help business during difficult times.
The UK retail sector is a stalwart of the economy, a constant presence across both our high streets and our online lives. However, it has also been hit hard in recent times, first by the Covid-19 pandemic and more recently as economic and other global pressures such as the war in Ukraine and the cost-of-living crisis have hit consumers and businesses alike.
What did we do?
CBI Economics worked with a consortium of some of the largest household names from the UK retail and wholesale sector to investigate the benefits that the sector as a whole delivers to the economy, and what they’re doing to support both households and employees up and down the country.
To help build the evidence around the sector’s socio-economic contributions, we provided the following services:
- An economic contribution assessment of the sector, at a national, regional and local authority level,
- A fiscal impact assessment of the sector,
- A social value assessment of the sector, including both quantitative and qualitative analysis,
- Policy evaluation, focusing on specific policies of interest to the sector
Drawing on our well-respected in-house economic contribution model, we were able to develop a current state assessment of the sector’s economic contribution not only at a UK level, but also at regional and local levels all the way down to Parliamentary constituency level. We also demonstrated the sector’s future growth potential, and we assessed the ways in which the sector contributes to local communities in deprived areas. This provided detailed, targeted insight to allow retail and wholesale sector businesses to capture the attention of both national and local policymakers using the most relevant and meaningful statistics.
What did we find?
The retail and wholesale sector makes a large contribution to the UK economy, with £352 billion of total UK Gross Value Added (GVA) (over 18% of UK total) reliant on the sector, which also contributes £50 billion in tax revenues, or over 6% of all government tax receipts.
Away from the pure financial contribution, the retail and wholesale sector is also responsible for the employment of 5.7 million people both directly and through its suppliers. 1 in 5 UK constituencies are highly reliant on the sector, with some areas relying on retail and wholesale for over one third of their total employment.
Equally, retail and wholesale businesses are investing heavily in the future. Firstly, by investing in innovations to digitalise and decarbonise their activities to keep pace with a changing retail landscape. Secondly, by investing in their employees, such as through supporting career progression and skills development, and also providing ad-hoc support such as cost-of-living payments.
However, the sector is doing all of this whilst facing down many challenges, not least from a UK government policy perspective. Business Rates are a large burden on the sector, with a potential 10% inflation-linked increase coming in the Spring, putting more pressure on bottom lines. Equally, whilst there is stated appetite for investment in training, the Apprenticeship Levy as is does not allow retailers the freedom they would like to upskill their workers.
Our members wanted to showcase the size of the contribution they make to the economy, up and down the country and across many different socioeconomic groups, and to use this to help them advocate for themselves in policy discussions.
What were the benefits of this work?
These retailers wanted to be able to engage with policymakers at the heart of government, to be able to demonstrate their benefits and contribution to the UK economy, both as a whole and right down to local authority level. CBI Economics was able to provide the robust empirical evidence that the sector needed to engage with their chosen stakeholders.
Our retail and wholesale members have found great value not only in the findings from the report, but also from the narrative and policy context in which it is set. They have found this, combined with the targeted local analysis, to be a really powerful narrative, especially around their strategic policy asks. This has also enabled the CBI to continue to advocate for our members, demonstrating that we listen and can work with them to facilitate discussions around relevant policies and continue to ensure their voice is heard.
Thanks to our unique positioning between businesses and government, we were able to help our members weave their narrative in an effective and impactful way. We have extensive experience at dealing with both sides, and we understand both perspectives and are therefore able to help our clients express themselves in the most impactful way by backing up their messages with robust empirical evidence.
About CBI Economics:
CBI Economics is the CBI’s economic consultancy arm. We develop economic evidence for businesses, policymakers and thought leaders. If you need to evaluate economic benefit, advocate policy change; gauge economic impact or assess risk; learn what businesses are thinking or explore future scenarios, then we’re here to help. Our expertise includes social and environmental impacts, decarbonisation, clean air, innovation, and regional growth. You can find out more about our services here and get in touch here.