Independent retailers are heading into 2026 with confidence at rock bottom, warning that government policy and a deeply disappointing end to last year have left the high street in a precarious position, new research reveals.
The quarterly Heartbeat survey from the British Independent Retailers Association (Bira) shows that over half of retailers (52.77 per cent) said they were either somewhat or highly unconfident about 2026, whilst not a single respondent described themselves as highly confident in their ability to invest over the next 12 months. Over a third (35.71 per cent) said they were highly unconfident about investment prospects for the year ahead.
That fragile outlook follows a difficult close to 2025. More than half of independent retailers (56.47 per cent) reported that Q4 trading was worse than the same period in 2024, with Christmas proving particularly disappointing. Bira members reported an average Christmas decline of 5.98 per cent year-on-year, with a median fall of eight per cent – meaning that for the typical independent retailer, the festive season fell meaningfully short of the previous year. More than half of Bira respondents (57 per cent) reported a negative Christmas compared to 2024.
The October budget cast a long shadow over the entire quarter. Multiple retailers reported that consumer caution set in well before Christmas, with October and November described as particularly difficult. "Customers were reluctant to shop in the two months before the budget," said one retailer, with sales picking up only marginally in December.
Business rates emerged again as a defining pressure on investment. Over two-thirds of retailers (69.41 per cent) said business rates had either slightly or significantly reduced their investment decisions over the past year, with 42.35 per cent reporting a significant reduction. Not one respondent said business rates had led to increased investment.
"I have been trading for over 160 years and this is unprecedented," said one retailer. Another reported they were "considering shutting the business with no trade and high overhead like rates, rent and utilities."
If business rates were reduced or reformed, however, the response was emphatic – 75.95 per cent of retailers said they would be very likely or somewhat likely to increase investment in their business.
"These results are deeply worrying. Our members went into Christmas hoping for a lifeline after a difficult year, and for many, that lifeline simply did not come," said Bira CEO Andrew Goodacre. "The budget created a cloud of uncertainty that hung over consumer spending throughout the final quarter.
"What makes this particularly frustrating is that the solutions are well within the government's grasp. Business rates reform alone could unlock significant investment from independent retailers across the country. Three quarters of our members say they would invest more if rates were reduced or reformed – that is a clear, costed route to growth being left on the table.
"Instead, retailers are delaying store improvements, cancelling hiring plans, and in some cases closing altogether. One of our members has been trading for over 160 years and told us this situation is unprecedented. When businesses like that are struggling to see a future, something has gone badly wrong.
"The government says it wants growth. Our members want to deliver it. But they cannot do that whilst fighting rising costs, punishing rates bills and a consumer base that has been frightened into holding onto its money. It is time for action, not warm words," Mr Goodacre added.
The Heartbeat survey was conducted in January and February 2026 with independent retailers across multiple sectors throughout the UK.