Businesses are facing a sharp rise of "140 per cent" in property costs due to the government's decision to cut relief for the retail, hospitality and leisure sector from 75 per cent to 40 per cent, property consultancy Colliers has warned.
The government’s decision to reduce business rates relief from 75 per cent to 40 per cent will see thousands of shops, restaurants, pubs, gyms, and nightclubs grappling with bills surging by over 140 per cent from the beginning of April.
This significant increase is expected to place further strain on an already pressured high street.
John Webber, head of business rates at Colliers, cautioned that the reforms could exacerbate challenges for retailers.
“The Labour government’s business rates policies will soon put even further pressure on the high street as bills for the new rating year start to drop through the letterbox next month.
“Labour said if it came into power it would save the high street. This slashing of reliefs will sadly do just the opposite as we’ll sadly see when the bills drop through the letterbox in the month ahead," The Times quoted Webber as saying.
The Conservative government introduced the retail, hospitality and leisure relief scheme in November 2022 to cushion the sector from high rates bills.
It provided eligible properties with 75 per cent business rates relief up to a cap of £110,000 per business. Rachel Reeves announced in October that this would be reduced to 40 per cent.
Colliers has calculated that this will mean that retailers benefiting from the relief will find their business rates bills increasing in April on average from £3,751 a year to £9,003.
Restaurants will face a rise on average from £5,563 to £13,351 a year. The rates bill for the average pub will also go up from £4,017 to £9,642 a year.
The business rates system, forecast to raise £26 billion in England this year, is a property tax charged on most commercial properties, including shops, offices, warehouses and factories.
Labour’s manifesto pledged to replace the business rates system by raising the “same revenue but in a fairer way” to “level the playing field” between the high street and huge online companies and to tackle the scourge of empty properties.
A Treasury spokesman said, “Without our action, business rates relief for retail, hospitality and leisure would have ended completely in April this year.
"Instead, we are protecting one in three business properties from paying business rates, extending 40 per cent relief for 250,000 properties in retail, hospitality and leisure and introducing a new permanently lower business rate in 2026, while more than half of employers will either see a cut or no change in their National Insurance bills.”
Philip Morris International (PMI) has forecast an increase of up to 12.5 per cent in adjusted diluted EPS for 2025, following a strong financial performance in 2024, driven by the continued expansion of its smoke-free product portfolio.
The company delivered a reported diluted EPS of $4.52 (£3.63), or $6.01 before a Canada non-cash impairment of $1.49, compared to $5.02 in 2023. Adjusted diluted EPS reached $6.57, representing growth of 9.3 per cent, and 15.6 per cent on a currency-neutral basis.
“2024 was a remarkable year for PMI,” said Jacek Olczak, PMI chief executive. “We delivered very strong full-year results driven by the continued growth of IQOS and ZYN in addition to a robust combustibles performance.”
Olczak highlighted the recent US FDA authorisation of all currently marketed ZYN nicotine pouches, calling it “further evidence of the compelling science supporting smoke-free products.” He also urged other countries to follow the US lead and embrace effective tobacco harm reduction measures, particularly where smoke-free alternatives are banned.
Quarterly shipments of heat-not-burn (HTU) and oral smoke-free products exceeded 40 billion units for the first time. Full-year net revenues for the Smoke-Free Business increased by 14.2 per cent (16.7 per cent organically), with gross profit up 18.7 per cent (22.7 per cent organically). Smoke-free products now account for 40 per cent of PMI's total net revenues and approximately 42 per cent of gross profit. The company estimates 38.6 million adult users of its smoke-free products.
IQOS continues to be a strong performer, strengthening its position as the second-largest nicotine ‘brand’ in markets where it is present. HTU adjusted in-market sales (IMS) volume was up an estimated 12.6 per cent for the full year. In Japan, ILUMA i fuelled IQOS growth, with adjusted IMS up around 13 per cent for both the full year and the fourth quarter. In Europe, IQOS HTU adjusted market share increased to 10.6 per cent in the fourth quarter. VEEV is also gaining traction as a top 3 pod brand in 13 European markets.
In the oral smoke-free products business, full-year shipment volume increased by nearly 28 per cent in cans (nearly 25 per cent in pouches). Fourth-quarter shipment volume increased by 25 per cent in cans (22 per cent in pouches), driven by ZYN nicotine pouch growth in the US.
Full-year net revenues grew by 4.0 per cent (5.9 per cent organically) in the combustibles business, primarily due to strong pricing.
For 2025 fiscal, PMI forecasts reported diluted EPS to be in the range of $6.55 to $6.68. Excluding adjustments, this reflects a 7.2 per cent to 9.1 per cent increase compared to 2024’s adjusted EPS of $6.57, or 10.5 per cent to 12.5 per cent growth on a currency-neutral basis.
The company anticipates total cigarette and smoke-free product shipment volume growth of up to 2 per cent, driven by smoke-free products. Net revenue growth is projected at around 6 per cent to 8 per cent on an organic basis.
“With strong momentum across all categories, we are confident that our smoke-free transformation and unparalleled brand portfolio will continue to deliver excellent performance and create value for our shareholders in 2025 and for the long term,” Olczak said.
The forecast assumes an estimated 1 per cent decline in international industry volume for cigarettes and HTUs (excluding China and the US), and an acceleration in US nicotine pouch shipment volume. It also factors in capital expenditures of approximately $1.5 billion, including further ZYN capacity investments in the US.
Post office Horizon scandal campaigners have slammed the government for extending a post-Brexit contract worth £67 million with the controversial firm Fujitsu.
A recent report by The Independent stated that His Majesty’s Revenue and Customs (HMRC) has granted a year-long extension to Fujitsu, which developed the faulty software leading to the wrongful prosecution of hundreds of subpostmasters for theft and false accounting, to run its Trader Support Service (TSS),
Fujitsu ruled itself out of bidding for government contracts in January last year due to its role in the Horizon Post Office scandal.
But the extension, worth £66.8m and detailed in documents seen by the media house, was approved because it is not a new contract.
Former sub post-mistress Seem Misra OBE has criticised the government over this move.
She stated on X, "We (SPMR) couldn't work due to wrongful convictions, yet Fujitsu—whose system destroyed lives—is expanding. What have they offered this time to stay quiet? Where's the justice?"
— (@)
Lord Arbuthnot, who campaigned for wrongly convicted sub postmasters, said it was “a worrying decision by the government on several levels”.
“First, it sends Fujitsu and other companies the message that the country doesn’t care about the unethical behaviour shown by Fujitsu in the Post Office scandal.
“Second, it weakens the government’s bargaining power in requiring Fujitsu to bear a substantial portion of the cost of that scandal.
“Third, it suggests that the government is uncomfortably dependent on Fujitsu. And fourth, it ignores the fact that Fujitsu’s capability on this contract may be no better than their Post Office capability," he told The Independent.
“Why didn’t they start work earlier on finding someone else?”
Meanwhile, HMRC said the extension was needed in order to “ensure a period of stabilisation” while new trading arrangements come into place under the Windsor Framework.
It has promised to run a procurement process in the coming months to replace Fujitsu in delivering the service.
Fujitsu in the past has won nearly £6.8bn in nearly 200 contracts from the public sector, including 11 for HMRC to the value of over £1bn, and 12 contracts with the Ministry of Defence for £582m.
High streets need to optimise for midweek office workers as Brits return to office, as shown by latest data on footfall, suggesting areas of focus for retailers such as extending trading hours in the evening and paying attention on grab-and-go meals.
According to the latest data from retail tech specialist MRI Software, retail footfall bucked seasonal trends in January, rising +1.4 per cent year on year across all UK retail destinations,
This marks the first annual increase in January footfall since 2016 (+1.2 per cent), outside of the pandemic period, suggesting that a stronger return to office work is driving retail visits as businesses push employees back to in-person work.
As expected, post-holiday footfall dropped sharply month on month, falling by almost -20 per cent across all UK retail destinations.
The decline was most pronounced in the second week of January, coinciding with schools and offices reopening, exacerbated by heavy snowfall and widespread travel disruptions.
High streets bore the steepest decline, with footfall plunging -22.4 per cent from December to January, followed by shopping centres at -21.7 per cent, while retail parks fared slightly better with a -16.5 per cent decline.
However, the shift back to office-based work was evident throughout January.
Weekday footfall rose by +1.6 per cent year on year, while weekend footfall dropped by -3.5 per cent, underscoring the growing weekday retail opportunity.
MRI Software’s Central London Back to Office benchmark showed a +1.4 per cent annual footfall increase, largely driven by a +4.4 per cent uplift during early evening hours (17:00-20:00). The trend suggests that after-work activity is picking up, offering retailers an opportunity to tap into office workers' midweek spending habits.
Data from MRI Software’s Consumer Pulse report reveals that evening shopping (post-5PM) is now the most common time for office workers to visit retail destinations, with 34 per cent preferring to shop after work.
Tuesdays, Wednesdays, and Thursdays see the highest overlap between office attendance and retail activity, with 58 per cent of respondents working in the office on Tuesdays and aligning shopping trips for midweek convenience.
Additionally, 31 per cent of respondents reported visiting high streets during lunch hours—more than any other retail destination—highlighting the importance of proximity and convenience for office workers on their break.
Experts have raised warning over illegal high strength nicotine pouches saying they could cause inadvertent overdosing and harm to teenagers and young adults.
According to a recent BBC report, there has been an alarming rise in illegal nicotine pouches containing potentially dangerous levels of nicotine.
Trading Standards teams in Oxfordshire, Berkshire and Dorset have made more than 1,500 seizures in the past year.
During the last 12 months, Oxfordshire Trading Standards has seized more than 900 packets of non-compliant nicotine pouches from retailers and launched several criminal investigations.
In Dorset, 844 seizures were made by officers and in Windsor and Maidenhead 21.
Since the products are fairly new there are no specific regulations covering advertising, strength or age restrictions.
Instead, they come under General Product Safety Regulations which means they need to be clearly labelled in English with safety guidelines.
"Nicotine is a poison, you need to know who to contact if something goes wrong, what to do if you swallow it, how many is safe to have over a period of time," BBC quoted Jody Kerman, head of Trading Standards at Oxfordshire County Council, as saying.
"If it's not in English, how are you supposed to know how to use it safely?"
Most pouches contain six to 20 milligrams (mg) of nicotine while some products contain 50mg.
Some illegal pouches claim to contain as much as 150mg of nicotine, although tests conducted on behalf of Trading Standards found actual levels varied greatly.
The government said new legislation would stop nicotine products being marketed to children and it was investing £30 million in enforcement.
Two of the largest companies, Japan Tobacco International and British American Tobacco that are behind brands such as Nordic Spirit and Velo, said their products were only meant for over-18s and they welcomed stronger regulations.
The Department of Health and Social Care said: "Snus is harmful and illegal to sell in the UK, which is why we are cracking down on illicit retailers by boosting funding for enforcement on the high street and at the border.
"Our Tobacco and Vapes Bill will put us on track for a smoke-free UK and stop vapes and nicotine products, including nicotine pouches, from being marketed to children."
Supermarket Asda has announced the joining of Jo Whitfield in its board of directors as a Non-executive Director to support its turnaround plans.
Whitfield previously spent eight years at Asda from 2008 onwards, holding a number of senior positions in operations, e-commerce, commercial, general merchandise and money & mobile.
She then joined the Co-op, where she was Chief Executive of Food for five years from 2017. Until last year, she was the CEO at Matalan, leading a business turnaround strategy.
Asda noted that given her breadth of experience in the convenience market from her time at the Co-op, she will have a particular focus on supporting the growth of the group’s Express c-store chain.
In recent weeks, Asda’s new Chairman, Allan Leighton, has made several changes to the struggling retailer’s management team to support his strategy to return the chain to its traditional focus on value.
He is also reported to have restarted the group’s search for a Chief Executive, having operated without a permanent leader since the abrupt departure of Roger Burnley in August 2021.
At the end of January, Asda announced that it was cutting prices on over 4,000 products as part of a move to re-establish its value credentials and win back shoppers after a slump in its market share over the past year.
Commenting on his latest appointment, Leighton said, “Jo is one of the UK’s most experienced retail leaders and has a deep knowledge of the food retail, convenience and fashion markets.
"She also understands Asda’s DNA and the role this business plays in delivering value for hard-working families. We are delighted to welcome her back to Asda.”
Whitfield, who will join Asda shortly, added, “Asda is one of the biggest names in retail and plays an important role in the daily lives of millions of customers and communities throughout the UK.
"It is a business that I have a strong affinity with and I look forward to working with Allan and the rest of the leadership team to help Asda get back on track.”