In April, employers will face higher National Insurance Contributions (NICs) and an increase in the UK’s National Minimum Wage, both announced in October’s Budget, which will add more strain on retailers. Some retailers have already announced plans to raise prices, while others intend to cut jobs in 2025. In these times of uncertainty, retailers are looking for solutions to navigate the changes. Can RFID be the answer? In this blog post, we dive into the benefits RFID can bring to retailers looking to reduce costs and become more efficient.

Rising Costs for UK Retailers in 2025

From April, employers will have to adjust to higher costs, as both National Insurance Contributions (NICs) and the National Minimum Wage are set to rise following October’s Budget announcement. The NIC rate for salaries above £5,000 will rise to 15%, up from the current 13.8% on salaries above £9,100. Additionally, the minimum wage will increase across all age groups: employees aged 21 and over will receive £12.21 per hour (a 6.7% increase), 18-20-year-olds will earn £10.00 per hour (a 16.3% increase), and 16-17-year-olds will see their hourly wage rise to £7.55 (an 18% increase).

This is accompanied by a decrease in the discount on business rate from 75% to 40% which means that the sum being paid by individual businesses will increase significantly. And unfortunately according to BRC chairperson Helen Dickenson: "improvements to the business rates system will not come until 2026”.

This increase causes a real concern among retailers who constantly get affected by changes and instabilities. In this case, it will cost the UK retail industry £2.5 billion in 2025. Retailers Retail giants like Tesco, Boots, Marks & Spencer, and Next are already warning that this rise will result in higher prices for customers and potential job losses across the industry.

Eventually, this cost will impact customers facing higher prices, employees receiving smaller pay raises, job cuts leading to increased unemployment, and even store closures.

This triple burden made many retailers make hard decisions toward 2025. For instance, Over half (54%) of companies plan to raise prices as a result of the Labour government’s budget, according to a Bank of England survey, while 61% expect profits to fall.

According to the CIPD survey, just over a third of the 2,000 firms it spoke to said they planned to reduce their headcount through redundancies or by recruiting fewer workers.

The shifting landscape is forcing retailers of all sizes to reassess their decisions.

According to CEO of Primark owner ABF George Weston, this “disappointing” Budget will cost fashion giant “tens of millions” “We are particularly hit by the reduction in the threshold because we employ a lot of part-time people,” he told Retail Week. “From younger people who want to work on a Sunday or mums who want to work a few afternoons, these are people who we wouldn’t have been paying national insurance [for] before.

This change will require retailers to adapt and rethink their strategies to stay resilient and profitable amid these challenges. Technologies like RFID have long been known to improve efficiency and reduce costs, but can RFID help retailers navigate this new, frustrating reality?

How RFID Helps UK Retailers Reduce Costs and Improve Efficiency

RFID is known for making inventory counts faster and more accurate, but its benefits go far beyond that. It reduces costs, improves efficiency, increases sales, and enhances decision-making and planning, all contributing to sustainable growth. Here’s how:

RFID Reduces Retailers' Dependence on Large Labor Forces

RFID automates countless daily retail tasks, from shipment validation and inventory counts to replenishments and more. As a result, it significantly reduces the time and effort required to complete these tasks.

For example, in-store shipment validation no longer requires extra staff, it can be done quickly by regular store employees in just a few minutes. Likewise, instead of needing an entire team to count stock on the sales floor, one or two employees can complete the task using a handheld RFID reader in about an hour, allowing store operations to continue uninterrupted. This reduces the need for additional staff dedicated to stock handling.

Moreover, RFID paves the way for further automation, such as self-checkout systems, automated order-pickup kiosks, and other solutions designed to free up employees while allowing customers to serve themselves. Together, these efficiencies enable retailers to reduce labor costs by requiring fewer employees per shift.

RFID Helps Reduce Shrinkage

Retailers lose significant amounts of money due to shrinkage, whether from internal theft, retail crime, or losses along the supply chain. RFID helps address these issues by enabling real-time stock tracking across all locations, ensuring nothing goes missing, and identifying where and when theft occurs.

Ultimately, reducing losses means retailers can sell more and avoid the extra costs of compensating for missing stock.

RFID Increase Sales

RFID has both direct and indirect effects on increasing sales.

Directly, RFID ensures full stock availability on shelves, enables quick and timely replenishments, and improves product findability, leading to more sales and upsells.

Indirectly, RFID empowers management with data-driven decision-making. It provides a clear, real-time view of what’s working and what’s not at each location. As a result, retailers can fine-tune their strategies, optimize allocations, and make better production decisions for sustainable growth.

Reduce operational costs

RFID enables retailers to improve efficiency at every stage of their supply chain. With RFID, retailers can produce the right quantity without relying on excessive safety stock, reducing overproduction and high storage costs.

It also helps retailers make smarter allocation decisions, minimizing the need for constant replenishment from distribution centers to stores and between store locations.

Additionally, RFID ensures all resources are used efficiently, preventing losses, including returnable transport items (RTIs). It helps retailers track RTIs, ensuring they are returned on time, in the right condition, and not lost or stolen, reducing the need for constant replacements.

Getting Started with RFID

RFID brings numerous valuable benefits to retailers, making businesses as profitable as possible. Not only does RFID help reduce costs and increase profits, but it also opens doors for future integrations and solutions, ensuring retailers stay ahead with the most advanced technologies.

While many retailers have considered deploying RFID but never acted on it, this year has shown just how critical it is. Retailers can no longer afford to waste money on blind spots.

The initial investment in RFID may seem complex and expensive, but once implemented, there’s no turning back. Retailers who have adopted RFID can’t imagine how they used to operate without it. The ROI alone makes RFID a must-have.

To choose the most cost-effective and flexible solution tailored to your needs, get in touch with Chainlane. We’ve built solutions for retailers of all types and sizes. Our lightweight RFID add-on integrates seamlessly with your existing systems, so you don’t have to change your workflow. We work alongside you, ensuring a smooth deployment that gives you peace of mind, knowing you have full control.

Want to learn more or have questions? Talk to us!