In this week’s Budget, the chancellor announced the relaxation of Sunday trading laws, devolving powers to decide how long shops can open for to local authorities.
The current laws, introduced in 1994, restrict the opening time of larger stores (those over 3,000 sq ft) to a maximum of six hours.
The reasons put forward for the change include the economic benefits to be derived from longer hours - with the oft-quoted example of the 3.2% surge in sales when Sunday trading laws were relaxed during the 2012 Olympics. Research also states that extending trading on a Sunday by just two hours would create 3,000 jobs and £200m of extra income for the UK a year. This, combined with the rise in internet and online shopping, has in effect already led to 24/7 trading in a virtual world - making a strong case for relaxing the rules.
However, opponents of the relaxation range from religious leaders to union leaders and, unsurprisingly, the smaller independent retailers.
The Church of England has stated it believes the possibility of a ‘common day off every week’ is important for both community life and family stability. This is echoed by the unions, who argue that employees in the retail sector should have access to one day a week where they can relax with their friends and family.
Technically, employees can opt out of Sunday working but in reality very few employees do. This could be from the fear of the impact on their careers or maybe due to personal preference: there are often financial benefits of working on Sundays. It could also be that since the introduction of limited Sunday trading more than 20 years ago, those people entering the sector accept that working on Sundays goes with the territory.
It is no wonder that the independent retail sector is generally opposed to these changes. We have seen a major change in grocery retailing in recent years as the large multiples have seen pressure on their margins from the discounters, while we have also seen the likes of Tesco and Sainsbury’s move away from the large out-of-town supermarkets into opening convenience-style stores. This has put pressure on the smaller independent retailers, with some suffering 25%-plus attrition following the opening of a big four local store. The proposed changes are likely to cause further pain and the greater competition will only drive down margins in an already hard-hit independent sector.
But, ultimately, will a relaxation in Sunday trading actually deliver the economic growth hoped for by the chancellor? In truth, no one really knows for certain but there is some evidence that suggests a relaxation in the hours will boost employment which, for a government with a sizeable deficit to plug, is likely to be the deciding factor. Unless of course we see a revolt by backbench Conservative MPs, coupled with a Labour party either influenced by the large unions or smelling an opportunity to give the new government a bloody nose, defeat the proposed changes in the House of Commons.
Jeremy Cooper is head of retail and consumer brands at Crowe Clark Whitehill
No comments yet