Sainsbury’s chief executive, Simon Roberts, has indicated that consumers should brace for price hikes as a direct consequence of the recent government decision to elevate National Insurance Contributions.
Simon Roberts has articulated his concerns following the government’s announcement to increase employers’ National Insurance Contributions from 13.8% to 15% for earnings above £175, beginning in April 2025. This amendment, as reflected in Chancellor Rachel Reeves’ first budget, will impose an additional £140 million burden on Sainsbury’s business operations. Roberts highlighted that the supermarket industry typically operates on slim margins, leaving little room to absorb such significant cost increases without affecting inflation.
Roberts stated, “When you think about the £140m in our business, I don’t think you can shy away from the fact that, because of the changes on everyone’s cost base, it is going to beat through into higher inflation.” He stressed that while efforts will be made to minimise the impact, the inevitability of inflationary pressures remains due to escalating costs. The low-margin nature of the supermarket sector exacerbates the issue, limiting the ability to cushion these financial hits without passing costs onto consumers.
The reaction within the retail industry has been one of concern, with Helen Dickinson, CEO of the British Retail Consortium, describing the rise as another instance of burdensome taxation impacting an already strained industry. She warned that this could curtail investment in retail stores and employment.
Furthermore, Stuart Machin, CEO of M&S, expressed dissatisfaction regarding the ambiguity surrounding business rate reform, expected in 2026. Machin noted his disappointment over the lack of clarity and the delay in implementing reforms, which could further compound the industry’s financial challenges.
The impending increase in National Insurance Contributions presents a financial challenge for the retail sector, particularly for supermarkets like Sainsbury’s. As firms anticipate heightened operational costs, consumers may face unavoidable price rises. Industry leaders continue to voice their concerns, urging the government to consider the broader impacts on investment and employment.
