Retailers' bodies react over Truss' business energy cap announcement

Retailers' bodies have given a mixed response to Prime Minister Liz Truss' much-anticipated support plan aimed to help households and businesses cope with spiraling energy costs.

Truss announced an Energy Price Guarantee which sees a £2,500 annual price cap for two years from start of Oct 1 for consumers and a new six-month scheme for businesses which will provide equivalent support to that being offered to consumers.

This support scheme for businesses’ will be reviewed in three months’ time to see if the help should be more targeted towards certain industries.

Association of Convenience Stores (ACS) chief executive James Lowman welcomed the announcement for the support for businesses, saying it is "much-needed and long-awaited".

Association of Convenience Stores (ACS) chief executive James Lowman

"We have been calling for a price cap for local shops in line with what we already see in the domestic market. While we are pleased that the Government has taken action to support businesses with their spiralling energy costs, we are clear that help may be needed for local shops beyond the current 6 month timeframe.

The British Independent Retailers Association (BIRA) also has welcomed the news that the government is intervening in the energy crisis for businesses.

In an open statement to the UK's new leader, Bira's CEO Andrew Goodacre said the announcement was welcomed by business.

"Making the energy rate for businesses the same as consumers still imposes a 300% increase on energy bills for many businesses, and that will still cause hardship for those business owners. We also believe that any review over the next six months should have a broader remit of looking at all business costs.

Bira's CEO Andrew Goodacre

"There is limited prospect of prices reducing in six months time, and so we cannot afford to see business rates increase in line with inflation just as this business support comes to an end."

In a survey conducted at the end of August to Bira members, 65 percent of business owners had said a price rise would force them to reduce the number of staff they had or reduce wages, while 40 percent were considering limiting opening hours, while 23 percent were looking to permanently or temporarily close their business once the proposed price hike came in October.

In addition to the cap, a new Energy Supply Taskforce has been created to negotiate long-term energy contracts with domestic and international suppliers of energy.

Meanwhile, the National President of the Federation of Independent Retailers (the Fed), Jason Birks, said that although the "devil is in the detail", today’s news of support for businesses should give struggling retailers some comfort and relief.

Jason Birks, National President of Fed

“Six months is a starting point, but the Fed and its members need longer term assurances that support will be ongoing. However, we look forward to hearing more about the financial support that will be available and assisting members in making sure they receive the help and support they need.”

“When soaring energy bills are added to falling margins and rising payroll costs, it may only be a matter of time before communities lose access to the groceries and services that local stores provide – but more importantly they will also lose a heart," Birks warned.

“To survive this crisis, we need more financial support from the government and for the energy price cap to be applied to businesses too, even though this may be too little, too late.”