Retailers praise ‘emphatic clarity’ as Conservatives secure election win

The Tories have secured an 80-seat majority in a comprehensive victory, winning seats in 362 constituencies overall.

Many UK retail bosses have praised the result and the mandate it gives Boris Johnson to deliver on Brexit.

AO.com founder and chief executive John Roberts said: “This is a fantastic result because not only have we got clarity but emphatic clarity – it’s a clear message from the country about what it wants and it gives the government a mandate to get on with the job ahead.

“Whichever side had won, all the business sector has been asking for clarity. We know have that and we’re not going to see vast swathes of industry nationalised, which will mean people can get on with life with some certainty.”

“My disaster scenario would have been waking up to see December 13 looked exactly like December 12 from a political perspective”

Peter Pritchard, Pets at Home

A senior grocery executive echoed this view. “It’s likely to lead to less instability, which can only be a good thing,” he says.

“I actually thought we were going to have another hung parliament, so in that sense, things could have been a lot worse today and brought more uncertainty for the whole country. At least we know who the prime minister is and we have a government in place.”

Pets at Home chief executive Peter Pritchard said: “In respect of who was going to win, thank god we have some certainty.

“My disaster scenario would have been waking up to see December 13 looked exactly like December 12 from a political perspective and it doesn’t, it looks different. What we craved more than anything else is certainty, so now we can crack on and run our businesses with a level of understanding of what the future will hold now.”

‘The government needs to help’

Majestic Wine executive chair John Colley said the government should “address the loopholes” that enable online players such as Amazon to pay less tax and leave traditional retail at a “disadvantage”.

“We are a nation of shopkeepers, more so than anywhere else in Europe, and it’s incredibly tough out there. The government needs to help us,” he said.

“The number of people in the electorate who work in retail is huge. When you read about a big retailer going, it’s thousands more jobs gone, thousands more people who aren’t paying taxes who need to be redeployed and potentially upskilled to get another job somewhere else.

“Obviously it falls on retailers to employ people and pay them and train them, but the government need to help retailers adapt and they need to help us look after those people. Anything they can do that helps us to employ great people in our stores and keep them employed long term would be welcome.”

“I expect everything to remain the same as they were the incumbents and they won. They are responsible for many of the problems in business”

Mark Constantine, Lush

However, Colley praised the Conservatives’ pledge not to raise corporation tax.

“Anything that enables us to handle our cost base more efficiently and gives us some space to employ and train people in our stores is helpful. So keeping corporation tax at the current level is definitely a boost,” he says.

By contrast, Lush founder and chief executive Mark Constantine is adamant an increased Conservative majority will not provide a much-needed fillip for the retail sector.

“I expect everything to remain the same as they were the incumbents and they won. They are responsible for many of the problems in business – applying the apprenticeship levy, increasing property taxes, increasing wage bills. As they did all of that in the first place, why would anything change? Boris said ‘f*** business’ and now he has an increased majority.

“I expect the retail economy to be bouncing along the bottom for a little while yet.”

Position of strength

One retail executive is also cynical about Johnson’s commitment to helping the retail sector, dismissing his pledge to launch a “fundamental review” of business rates in the first Budget as “bullshit.”

Johnson has pledged to “get Brexit done” by January 31 and the senior grocery executive was confident that this victory would mean the deal he brokered with the EU would be pushed through by that date.

“He’s got the extension to the end of January and he’s got the majority he wanted. I can’t believe 70 newly elected MPs will vote against him now that most of the rebels are out the door, so he’ll get his deal through,” the executive says.

Roberts echoes this view: “I am behind getting Brexit done, Boris has got a deal on the table that he can now get through Parliament very easily, so it won’t come to a no-deal scenario, we get into the trade negotiation phase. I don’t know if you have tried to have a negotiation with a blindfold on, your arms tied behind your back and with 23 different opinions being thrown about but it’s hard to get much done. He now has a position that strengthens our ability to get a deal that works for the UK.”

“We should have a consumer boom in retail right now – but the consumer has been displaying wait-and-see, recessionary-type behaviour because of uncertainty”

John Roberts, AO.com

Constantine, however, has his reservations. “I don’t think Brexit is doable – no matter what party you’re in. Not politically hard to do, but economically hard to do. It will be interesting to see if they manage it.”

Roberts is optimistic that the political clarity afforded by Johnson’s win will also nudge shoppers to spend more in bigger ticket categories.

“In terms of consumers spending, we should have a consumer boom in retail right now – we have virtually full employment, rising wages, stable oil prices, but we have the worst housing figures in decades because the consumer has been displaying wait-and-see, recessionary-type behaviour because of uncertainty,” he says.

“I’m an eternal optimist, but I would expect to see people get more confident about moving house, which triggers all sorts of investments from a domestic point of view which is very good for retail on a number of levels.”

The grocery executive also believes shopper spend, which is forecast to be marginally down year on year by PwC, to increase now Johnson has secured a clear majority.

“If Christmas has been a slow start in terms of sales then that may take some of the sting out of things and provide a bit of a boost,” he says.