The recent government economic measures have sparked criticism from the retail sector.
- John Lewis boss, Nish Kankiwala, describes the government’s actions as a ‘two-handed grab’ from businesses.
- Increased national insurance contributions and delayed business rates reform are set to impact UK businesses.
- John Lewis faces significant additional costs due to these measures, prompting concern among stakeholders.
- The company plans to mitigate price impacts on consumers amidst rising inflation.
The UK government’s recent economic adjustments have drawn sharp criticism from Nish Kankiwala, the head of John Lewis Partnership. He described the measures as a “two-handed grab” due to their significant impact on businesses.
Kankiwala highlighted concerns over the government’s decision to increase employers’ national insurance contributions and postpone the reform of business rates. These changes are expected to impose “tens of millions” in additional costs on John Lewis and Waitrose from the coming year.
Despite these challenges, Kankiwala acknowledged the difficult decisions faced by the government. However, he stressed the need for a fundamental overhaul of business rates, as both these and the costs related to their workforce are anticipated to rise. This presents a significant burden on retailers already navigating a complex economic landscape.
The chief executive urged for a delay in national insurance changes alongside a significant reshaping of business rates, which he believes would make a “massive difference”. Such changes are crucial for businesses aiming to sustain their operations without transferring increased costs to consumers.
After a record year of inflation, Kankiwala expressed the company’s intent to control consumer prices despite the mounting challenges. He remarked that inflation has recently been stabilised, but any resurgence would be disadvantageous for all parties involved.
John Lewis has reported progress, forecasting significantly higher full-year profits after reducing pre-tax losses considerably in a recent six-month period. The company remains committed to its £542 million investment in operations, maintaining focus on its growth strategy regardless of the financial pressures.
The economic measures pose challenges, yet John Lewis remains steadfast in its growth ambitions.
