Retailers Urged to Start Planning for New HFSS Regulations

The new High Fat Salt and Sugar (HFSS) regulations are set to be introduced on 1st October 2022 and will affect any stores of 2000 sq. ft. or over. They will mean that HFSS products can no longer be promoted in key store locations such as checkouts, store entrances, aisle ends and any online equivalents and will have a huge impact on retailers.

However, the chief executive of the Association of Convenience Stores (ACS), James Lowman, is urging the government to re-think, stating “Going ahead with the location restrictions in October this year, costing thousands of pounds per store, will have a huge impact on thousands of small businesses that are already struggling to make ends meet.

“Retailers cannot absorb these costs; they will ultimately have to pass them on to their customers during the same month that everyone’s energy costs are set to skyrocket.”
A ban on TV adverts for HFSS products before the 9pm watershed and on paid-for adverts online has, however, been delayed to January 2024.

Online sales tax has ‘overwhelming support’ of retailers

Early in 2022 the government revealed that it would start a consultation on an online sales tax policy . The consultation is due to close on 20th May.

Research has shown that 71% of retailers with an online presence support the tax whilst only 54% of those surveyed believe that click-and-collect sales should be subject to the tax.
John Collier, Head of Business Rates at property specialist Colliers, says “It certainly seems there is overwhelming support to bring in some sort of online sales tax to try and level the playing field and take the full burden of business rates off bricks and mortar retailers”.

However, Claire Davenport, Notonthehighstreet’s chief executive, believes that an online sales tax would be a “mistake” and penalise small firms already battered by the pandemic and that it would come at the worst time for small business owners, with many having shifted online due to the Covid-19 pandemic or set up internet ventures after losing their jobs in the crisis. “Penalising small businesses that are trying to follow a trend that’s happening in the market is not right.”

Rishi Sunak's Spring Statement Fails to Avert the Cost-of-Living Crisis

With inflation forecast to average 7.4% this year, spending power will come under huge pressure, particularly for the least affluent households who spend a disproportionate amount of their income on non-discretionary items such as food, energy and fuel according to Retail Economics chief executive, Richard Lim.

The Office of Budget Responsibility (OBR) said that, despite the policy changes unveiled, real household disposable income will fall 2.2% and this will have a knock-on effect on the retail industry. Lim says: “We’re likely to see recessionary behaviours kick-in for many households who will cut back on the nice-to-haves and prioritise low costs to make their budgets stretch that little bit further. A more cost-conscious consumer will emerge in the coming months, looking to form new relationships with brands who can align to these new priorities.”

Eating out, clothing, takeaways and the weekly food shop are predicted to be the main targets for shoppers to make spending cuts. KPMG UK head of consumer markets, retail and leisure, Linda Ellett, says ““Retailers, who face inflationary pressures themselves, are having to discount where they can in order to keep custom, but this is not sustainable long term.

Businesses that opt to pass those costs on to the consumer need to be mindful of the need to clearly explain price increases in this landscape. Consumers have long memories.”

West End Retailers Can Now Move in Immediately Thanks to New Simplified Lease Initiative 

Leading property manager and developer Grosvenor has announced a new initiative called Simplified Lease which will allow retailers to take up new premises in just 72 hours.

This drastically cuts down on the waiting time retailers previously had to endure - which could sometimes stretch to as long as six months.

In a market first, Grosvenor has teamed up with occupiers across Mayfair and Belgravia to make sure that retailers are able to agree on a lease and access their premises within a few days. As a result, Grosvenor has already reported a reduction in typical associated costs of up to 90%.

The new initiative is proving popular with retailers, with 15 occupiers having already taken up new leases across the area, including My Wardrobe HQ and jeweller Vicky Sarge. According to Grosvenor, this is due largely to the "simplicity and transparency" of the offering.

Retail Director at Grosvenor, Joanna Lea, says: “We are extremely proud to be adding the Simplified Lease to our growing suite of occupier initiatives. We have been working hard to redefine the perception of a ‘landlord’, which means taking on a proactive and collaborative approach to these partnerships and simplifying processes or removing typical bottlenecks.

“A big part of this approach is listening to occupiers. We knew the hoops they had to jump through to get up and running was a real concern. By taking a pragmatic and service-oriented approach, the Simplified Lease enables brands to set up shop quickly and more cost-effectively.”

Online Retailers not SCA Compliant Risk Losing Millions as Two Factor Authentication Becomes Mandatory

On line retailers who are not set up for Strong Customer Authentication (SCA) risk losing £3.64m every day as the two-factor authentication became mandatory from 14th March.
Data from Barclaycard Payments shows that online retailers who are not fully compliant with SCA have already been losing out on significant amounts of revenue as the number of transactions subject to SCA and two-factor authentication increases.

Introduced and regulated by the Financial Conduct Authority (FCA), SCA regulation requires online shoppers to verify themselves at the checkout by entering a one-time passcode in addition to their card details. The two-factor authentication criteria applies to 100% of the millions of online and app-based transactions made every day.

“The introduction of mandatory SCA is the most significant payments milestone since the rollout of chip and pin more than 16 years ago,” said Barclaycard Payments’ CEO Rob Cameron.

While the new regulation is a positive step to keep customers’ data safe online, Barclaycard’s research shows that shoppers are “inclined to abandon transactions if it takes too long to check-out, demonstrating how important it is for businesses to have sophisticated fraud checks in place”.

“Merchants who aren’t yet ready should start to prioritise becoming compliant to avoid losing out on sales,” Cameron added.

“Our data has already shown the impact of not being prepared, and this will only get worse if steps are not taken now. The message to retailers is clear; if you don’t make buying online quick and easy for your customers they will simply go elsewhere.”

 

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