Marks & Spencer bosses have warned they can’t rule out price hikes after the retailer was hit with an extra £120million in costs from Labour’s tax bomb budget.
The company will do ‘everything we can’ to prevent price increases for shoppers, chief executive Stuart Machin said, although he admitted the company was facing ‘pretty significant costs to mitigate against’.
M&S is anticipating its tax bill to increase by £60million next year to around £520million following Chancellor Rachel Reeves’ decision to raise employers’ National Insurance to 15 per cent from next Spring.
Meanwhile, Ms Reeves also lowered the level at which companies have to start paying it – with Mr Machine branding the decreased threshold a ‘double whammy’ for businesses.
It comes as CEO of Sainsbury’s said changes to NI made by the government last week will add £140million to its costs next year, putting pressure on inflation.
Mr Machin told The Telegraph: ‘We planned [for an increase] because obviously it was well noted before the Budget that there was going to be some National Insurance increase for business.’
In addition, M&S is also bracing for a further £60million increase in labour costs from the changes to minimum wage – a cost the company had already considered prior to the Autumn Budget.
To make matters worse, retailers have been dealing with high levels of shoplifting as store theft offences at M&S surged to the highest level ever last year.
M&S chairman Archie Norman previously told LBC News that stores across the country get ‘very little help’ from police, even though retail theft rates have soared.
According to the Office for National Statistics, a total of 430,104 offences were recorded by police in the year to December 2023, up by more than a third (37%) from 315,040 in the previous 12 months.
Mr Norman’s comments echoed those of other retail bosses who accused ministers of allowing shoplifting to become effectively decriminalised, with many police forces failing to attend the majority of reports or gather any evidence when they do.
Figures this year revealed under 40 per cent of shoplifting reports were attended by the Metropolitan Police between April 2022 and April 2023.
Speaking to LBC’s Nick Ferrari on the issue, Mr Norman said: ‘I think it [shoplifting] is a problem. I think I have said before, but it’s a worldwide problem coming out of the pandemic. It’s happened everywhere.
‘We get very little help from the police and we have to accept that police are not interested in this sort of crime anymore.’
Despite the worrying statistics, Mr Norman said theft at M&S is actually going down ‘mostly’ because of the retailer’s own efforts and not those of police.
The High Street stalwart has pumped cash into crime prevention measures such as store detectives and camera systems.
Small business this month declared the Autumn Budget is ‘the final nail in the coffin’ as they continue to digest its impacts.
Bosses said they will be forced to axe services, lay off staff or even shut down as a result of Labour’s tax bombshell.
They are especially angry at a £25billion hike in employers’ national insurance, while others fear the effects of a 6.7 per cent rise in the minimum wage to £12.21 an hour.
Pub landlady Emma Woodhouse warned the higher rate would be ‘absolutely crippling’ to many hospitality businesses, while the owner of one bar in Manchester warned venues like his could soon become ‘unviable’.
Meanwhile, Richard O’Connor, Technical Director at floor matting business First Mats, warned that the national insurance hike would ‘significantly’ impact its plans to hire new staff.