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M&S CEO Stuart Machin has warned that UK retailers are still facing a mountain of costs despite Rachel Reeve’s push for growth.
Writing in the Sunday Times, Machin said that the government should lighten “the burden” the budget has loaded on the retail sector, claiming that the industry is being “raided like a piggy bank”.
He wrote: “Many of the announcements in Rachel Reeves’s speech last month were commendable — a focus on long-term planning, good ideas to free up investment in infrastructure and a more positive tone.
“But the speech failed to address the significant impact of the budget on the here and now, and at its heart remains a contradiction: long-term growth ambitions are laudable, but they are at risk of remaining only that unless action is taken to encourage growth today.”
He argues that, if left as it is, the budget will contribute to make UK retail become smaller, adding £7bn of extra employment costs and an increased packaging levy to a sector working on margins of 3-5%. At the same time, the impact is also being felt in the supply chain, with declining UK herds and beef and lamb prices up by more than 60% since 2020.
In his writing, Machin asked the chancellor to phase the timing of the NICs threshold decrease over two years to help employers manage the impact and pause and review all Department for Environment, Food & Rural Affairs (Defra) circularity recycling schemes. He also argued in favour of a new approach to business rates.
He said: “We need a proper review of business taxation facing retailers, not a tweak that redistributes funds within the sector. The £500,000 threshold hits high street stores, which I know the government did not foresee, so take those shops out of it.”
Machin added that M&S will “fight tooth and nail” to hold down prices for its customers, but the BRC and the Institute of Grocery Distribution are already projecting food inflation of more than 4%.
He concluded: “At M&S we are growing, but others are not and there is no doubt that there will be fewer jobs, fewer shops, and slower wage growth across the sector as a whole.”
