Business rates are back at the top of the retail agenda. Ahead of John Healey’s first Budget as Chancellor on 28 October, the heads of Marks and Spencer and the John Lewis Partnership have urged the government to reform business rates, warning that the current burden risks piling more pressure on high street shops.

If you buy, sell or supply to shops, the outcome will shape your costs, your margins and your buying decisions for the year ahead.

What Stuart Machin said: retail pays more than its share

Marks and Spencer chief executive Stuart Machin set out six ways the Chancellor could get Britain growing, and fixing business rates was one of them. His argument is simple: retail makes up around 5% of the economy but pays more than a fifth of all business rates, which he called unsustainable.

For independents, that imbalance is familiar. Rates are based on property values rather than how a business is performing, so a shop can face a hefty bill even in a tough trading year.

Protect the anchors and their neighbours

John Lewis Partnership chair Jason Tarry went further on how rates affect the wider high street. Writing in The Telegraph, he said the proposals under discussion rest on “a fundamental misunderstanding of how modern high streets work”.

His point is that large department stores and supermarkets act as anchor tenants. Footfall drawn to a John Lewis or a Waitrose also reaches the smaller shops, cafes and services around it, so penalising the anchors risks harming the businesses in their orbit. He called for reform of an “archaic” system so that it supports businesses that add something to local life.

The warehouse tax question: why retailers are worried

Much of the concern centres on a possible higher charge on large warehouses. City AM reported that retail bosses fear such a move could help pay for business rates cuts elsewhere, and that it would push their costs up and ultimately raise prices for shoppers. Mr Tarry said the higher charge would apply to just 18 John Lewis distribution centres but over 200 of its shops and Waitrose branches.

Sky News has since reported that further taxes on warehouses have been ruled out ahead of the Budget. As ever, nothing is certain until the Chancellor stands up on 28 October.

What it means for independents and suppliers: the effects travel down the chain

You don’t have to run a department store for this to reach you.

• Rates affect everyone on the street: If big anchors face higher bills, the cost pressure can show up in rents, pricing and the mix of shops in a town.
• Supply chain costs matter too: Warehouse and distribution costs flow through to wholesale prices, which can land on the margin of every retailer who buys.
• Shopper spending is already stretched: Higher costs that end up in shelf prices make a tough environment tougher.
• Reform could also help: A fairer system would free up cash that independents could put into stock, staff and better shop floors.

What to do before 28 October: plan for more than one outcome

You can’t control the Budget, but you can be ready for it:

• Know your numbers: Check your current rates bill and rateable value, and talk to your accountant about how different scenarios could affect you.
• Build a buffer into spring buying: If costs rise, margin is the first thing to feel it. Work out where you have room on pricing and where you don’t.
• Talk to your suppliers: Ask about lead times, minimums and pricing for the new season before the Budget changes the picture.
• Focus on what sells: In a squeeze, strong sellers and exclusive lines earn their shelf space. That’s where well-chosen new products pay off.

The bigger picture: retail wants certainty

Whatever the Chancellor announces, the message from the industry is consistent: retailers want a fairer, more predictable system so they can invest with confidence. It’s a theme we’ve followed closely, including in our earlier look at how the change in Prime Minister could affect UK retail.

Ready to plan your next season with confidence? Register to visit Spring Fair at the NEC Birmingham from 7 to 10 February 2027 to find new products, compare suppliers and meet the people behind the brands. You can also find out more about Spring Fair on our website.