Morrisons chief executive, Rami Baitieh, has urged the government to reconsider the timing of new cost burdens on businesses following the latest budget announcements.
Amid concerns over business sustainability, Morrisons CEO Rami Baitieh has highlighted the financial challenges imposed by recent government policies following the October Budget. Key changes include adjustments to business rates, the introduction of a packaging levy, and an increase in minimum wage, all set to impact businesses significantly by April 2025.
Of particular concern is the rise in employers’ National Insurance contributions, which are expected to increase from 13.8% to 15% on earnings exceeding £175 a week. Baitieh noted that this single change in National Insurance contributions is anticipated to cost Morrisons approximately £75 million, according to reports by The Sun.
Baitieh has publicly expressed his concerns, describing the situation as an ‘avalanche of costs’ facing businesses. He stated, ‘The National Insurance change adds insult to injury,’ emphasising how these financial demands could be overwhelming for businesses. He has appealed to the government for a phased implementation approach, akin to gradually increasing medication doses, to ease the transition.
This call for reconsideration is echoed by other leading UK supermarkets, including Sainsbury’s and Tesco. Sainsbury’s anticipates a £140 million increase in its National Insurance expenses, while Tesco faces a potential £1 billion rise over the next four years. In a recent communiqué, more than 70 companies, including Tesco, Sainsbury’s, Asda, and Morrisons, warned that the cumulative effect of these policy changes could escalate industry costs by up to £7 billion per year.
This latest round of financial obligations places additional pressures on the retail sector, which is already navigating a complex economic environment. Retailers fear that these increased operational costs may lead to unavoidable job cuts and higher consumer prices, further straining the market.
The concerns voiced by Rami Baitieh and other retail leaders underscore the need for a careful reassessment of government strategies to manage the financial impact on businesses, ensuring both economic stability and fair trading conditions.
