Morrisons CEO Rami Baitieh appeals to government to stagger Budget costs to alleviate pressure on retailers.
- Retailers face significant cost increases due to changes in business rates, National Insurance, and minimum wage rises.
- Packaging levies add to the financial burden on the retail sector, prompting concerns over job security and pricing.
- Retail industry warns of potential job cuts and price hikes as costs could rise by £7bn annually.
- More than 70 companies, including major supermarkets, join Morrisons in urging reconsideration of cost implementations.
In a recent address, Morrisons CEO Rami Baitieh urged the government to reconsider the current strategy of implementing an “avalanche” of Budget-related business costs. Speaking to The Sun, Baitieh emphasized the need for a phased approach to these financial changes, citing the accumulation of expenses such as increased business rates, alterations to National Insurance, wages, and new packaging levies.
Baitieh drew attention to the National Insurance changes, which have already cost Morrisons approximately £75 million. He stressed the impact these combined costs will have on the retail industry, including potential reductions in staffing and an unavoidable rise in consumer prices. Baitieh likened this situation to a medical treatment where a gradual increase is more manageable, suggesting a deferred or step-by-step implementation of these financial burdens.
Following the Budget announcement by Labour’s Rachel Reeves, this marks the first Budget from a Labour government in over a decade. The response from retailers has been swift, with warnings of “inevitable” consequences such as job losses and increased costs being communicated directly to Reeves. A collective of over 70 companies, including major players like Tesco, Sainsbury’s, Asda, and Morrisons, expressed their concerns over the financial impact, projecting industry-wide cost increases that could reach £7 billion annually.
This collective representation underscores the significant challenges the retail industry faces under the current Budget plan. Specifically, the combination of increased National Insurance contributions, a rise in the national minimum wage, and new packaging levies are seen as a trifecta of financial strain that could reshape the retail landscape. The call to the government from these businesses is clear: reconsider the pacing of these changes to prevent destabilising the industry further.
The current fiscal measures, if implemented simultaneously, could disrupt the retail sector significantly, prompting calls for a more phased approach.
