The Entertainer postpones store openings due to increased National Insurance costs.
- Retailer freezes head office hiring as budget impacts business plans.
- CEO Andrew Murphy cites government tax changes affecting new store viability.
- Other leading retailers express concerns over rising National Insurance contributions.
- Supermarkets warn of potential price hikes and budget adjustments.
The Entertainer, a notable toy retailer, has decided to postpone its plans for opening new stores. This move comes in response to the government’s decision to increase National Insurance contributions for employers. As a result, the company has also frozen hiring processes at its head office, reflecting broader challenges faced by retail businesses under changing economic policies.
Andrew Murphy, the chief executive, highlighted that two of the retailer’s slated store openings failed to meet viability assessments following the budget announcements. Speaking to BBC Radio 4’s Today programme, Murphy remarked, “We were just about to initiate the work and unfortunately the changes to National Insurance in particular just tipped that balance so those stores will now not be opening.”
The government’s decision involves raising employer National Insurance contributions from 13.8% to 15% on earnings above £175 per week starting in April. This increase has prompted various responses from the retail sector, reflecting concerns about rising operational costs. Murphy is among several industry leaders vocalising their challenges as they navigate these changes.
The impact of these tax increases reverberates across the retail landscape. Asda’s chairman, Lord Stuart Rose, mentioned the supermarket’s upcoming £100 million rise in tax costs due to these changes, describing it as “not an easy swallow.” Similarly, Sainsbury’s CEO Simon Roberts has underscored the difficulties faced by the grocer, indicating potential price increases as a means to offset the higher tax burden.
The increase in National Insurance contributions poses significant challenges for retailers, prompting strategic reassessments and operational changes.
