Retail Reduced – September 2026

Law Commission publishes further proposed amendments to Landlord and Tenant Act 1954

The Law Commission is currently reviewing the Landlord and Tenant Act 1954 (the Act) and has published its second consultation paper in June 2026. Although no changes have yet been made, the proposals could have significant implications for retailers with commercial tenancies. Under the Act, qualifying business tenants are granted "security of tenure", allowing them to remain in occupation and request a new lease on similar terms after their current tenancy expires, unless the landlord can successfully establish a statutory ground of opposition.

While the Law Commission's first consultation provisionally concluded that the security of tenure framework is likely to remain, the second consultation proposes a number of changes designed to modernise what many consider an outdated and overly burdensome regime.

Key proposals and what this may mean for retailers:

1. Short-term leases – currently, most fixed-term business tenancies of six months or less fall outside the Act's protection. The Law Commission is considering increasing this threshold to either one or two years. Increasing the qualifying lease duration may make it more difficult for smaller and growing brands to access security of tenure protection without committing to longer lease terms, potentially reducing flexibility for retailers when entering new markets or trialling new locations.

• Periodic tenancies – at present, periodic tenancies automatically benefit from security of tenure and cannot be contracted out. Another proposed reform is to exclude most periodic business tenancies from the scope of the Act. For retailers operating under informal or flexible occupation arrangements, the change could result in fewer opportunities to acquire security of tenure rights by default. Businesses may therefore need to pay closer attention to documenting occupation arrangements and securing longer-term contractual protections where required.  

• Contracting-out procedure – the current contracting-out process can be administratively burdensome: for a lease to be validly contracted out, a prescribed form must be served on the tenant with at least 14 days' notice. If less than 14 days' notice is given, the tenant must provide a statutory declaration. The Law Commission is considering incorporating the required warnings and declarations directly into lease documentation. A simplified process would be welcomed by landlords and tenants alike, reducing costs, delays and risk of procedural errors.

• Redevelopment Ground F – under the Act, a landlord can oppose a lease renewal where it intends to carry out demolition, reconstruction or substantial works. The consultation proposes extending this ground to cover refurbishment and retrofitting projects, including works required to improve energy efficiency and compliance with environmental standards. For retailers, particularly those occupying older high street units and shopping centres, this could make it easier for landlords to recover possession to undertake sustainability-led improvements.

• Modernising lease renewals – the Law Commission is also considering whether courts should have greater flexibility when determining the terms of renewal leases, including the ability to impose turnover rents (where rent is based on a percentage of the tenant's revenue generated from the property) and other modern leasing arrangements. This proposal is particularly relevant to the retail sector, where turnover-based and hybrid rent models are increasingly common and can better reflect trading performance than traditional rent structures.

While security of tenure appears likely to remain a fundamental cornerstone of the commercial leasing landscape, the proposed reforms could have a meaningful impact on retailers, particularly those relying on shorter-term or more flexible occupation arrangements who may find that fewer statutory protections are available. Conversely, reforms relating to turnover rents, and a more streamlined contracting-out procedure better reflect the realities of the modern retail market.

The consultation remains open until 16 September 2026, after which the Law Commission will consider stakeholder feedback before making further recommendations to the Government. For now, the review suggests evolution rather than revolution. However, the proposed changes could have a significant impact on leasing strategies across the retail sector, and retailers and landlords alike should monitor developments closely.

CMA's latest drip pricing investigations signal increased consumer law risk for retailers

The Competition and Markets Authority (CMA) has continued to demonstrate its willingness to use its enhanced consumer enforcement powers, announcing on 19 August 2026 that it has opened formal investigations into Trainline, Virgin Atlantic Holidays and RED Driving School.

The latest investigations centre on "drip pricing". This is where consumers are presented with an initial headline price, but mandatory charges are only revealed later in the purchasing journey, such as at the checkout stage. The CMA considers these practices problematic because consumers may commit time to a transaction before discovering the true cost, making it more difficult to compare prices across competing providers.

In its announcement, the CMA stated that it is investigating whether Trainline, Virgin Atlantic Holidays and RED Driving School adequately included mandatory fees within the upfront prices displayed to consumers. The regulator emphasised that consumers should be able to see the total price they will pay at the outset of a transaction.

Whilst the current investigations focus on rail ticket sales, holidays and driving lessons, the implications extend far beyond those sectors. Many retailers routinely apply delivery charges, administration fees, installation costs or other mandatory charges during the online purchasing process. Retailers should therefore consider whether the pricing information provided throughout the customer journey enables consumers to understand the total cost of a purchase before committing to buy.

The importance of compliance has increased considerably since the introduction of the Digital Markets, Competition and Consumers Act 2024. The CMA can now investigate suspected breaches of consumer protection law directly and, where an infringement is found, has the power to require businesses to compensate affected consumers and impose financial penalties of up to 10% of global turnover.

The CMA's latest activity aligns with its wider strategic objective of strengthening consumer confidence and promoting fair competition. Consumer protection remains a central pillar of the CMA's 2026-2029 strategy, with a particular focus on ensuring consumers can engage confidently in markets and that fair-dealing businesses can compete on a level playing field.

For retailers, the message is clear. Pricing transparency is no longer simply a compliance consideration but an active enforcement priority. Businesses should take this opportunity to review online purchasing journeys, assess how mandatory charges are presented to consumers and ensure that headline prices accurately reflect the amount customers can expect to pay. As the CMA continues to build precedent under its new powers, scrutiny of online pricing practices is unlikely to diminish.

It remains to be seen how the CMA's latest investigations will conclude, but retailers should expect continued regulatory focus on pricing transparency and wider consumer protection compliance throughout the remainder of 2026.

Retailers and the Government – in harmony, or singing from different hymn sheets?

The past year has been a difficult one for retailers. Between rising costs, shrinking footfalls, and low consumer confidence, retailers of all sizes are feeling the pressure. It seems that the new government recognises this, with the number of new policies affecting retailers being announced suggesting that retail is a priority sector – however, will these be enough to move the dial?

Andy Burnham's agenda of "good growth in every postcode" includes a number of policies relevant to retailers. Tightening planning rules to limit the number of vape shops and gambling centres on high streets and cutting business rates for pubs and bars by 20% (with a broader review of the system planned for 2027) will aim to bring customers back to physical retail destinations. Misleading discounts will also be banned, while planned changes to make subscriptions easier to cancel will now come into force earlier than planned in January 2027. The overall aim seems to be a catalogue of "everyday fixes", with the focus being on making sure that customers have more money in their pockets. Increased customer confidence and spending power would be positive for retailers, albeit any benefits would be primarily indirect.

The prevailing mood among retailers, however, is that these changes don't fully address the challenges they are facing. On business rates, for example, the 20% discount will benefit around 32,000 pubs and bars, but won't help other retailers (including those with larger properties who saw their rates rise in April). A recent letter from Mike Ashley (the owner of Frasers Group) to the government dismisses these changes as "shortsighted", and that broader action to reduce business rates is needed. Rising employment costs are another key area of concern for retailers, with the BRC estimating that businesses have absorbed £6.5bn in National Insurance increases, minimum wage rises, and policy changes brought in by the Employment Rights Act (among others). Concerns over costs rising in other areas, including increased regulatory compliance costs, loss caused by shoplifting and crime, and energy costs are also frequently expressed.

The key takeaway is that the government and retailers (especially larger retailers) are on different pages. The government's focus is on issues that affect consumers, with their focus being on improving high streets and putting more money in customer pockets – hardly surprising given that these are key issues for voters. Retailers, on the other hand, seem primarily concerned about the rising cost of doing business. Even on issues where there is agreement in principle – creating jobs, for example – there is still a conflict between retailers' bottom lines and the government's concern for public spending. The budget will take place in October, and it will be interesting to see how (or whether) the government is able to balance these competing concerns.