Labour’s Budget has sparked a wide range of reactions from retail leaders.
- Several CEOs, including John Roberts of AO World, express concern over rising costs.
- Andrew Murphy of The Entertainer reassesses growth plans due to budget impact.
- Michael Murray from Frasers highlights a blow to consumer confidence.
- Some, like Jollyes’ Joe Wykes, support the Budget as a challenge to innovate.
Labour’s recent Budget, introduced by Chancellor Rachel Reeves, has elicited strong reactions from the retail industry, with increased National Insurance contributions and new packaging levies topping the list of contentious issues. These measures have provoked a mix of condemnation and cautious support from various industry leaders.
John Roberts, the head of AO World, voiced strong opposition, lamenting the unforeseen tax increases post-election. His criticisms centre on the anticipated £8 million rise in costs due to higher National Insurance, which he argues will inevitably result in price hikes. Roberts’s scepticism about Labour’s sudden policy shifts reflects wider industry unease.
Similarly, Andrew Murphy, CEO of The Entertainer, highlighted the adverse effects on expansion plans. Although there are no immediate job cuts planned, the retailer is re-evaluating its strategy due to increased costs, reducing the number of viable locations for new stores by half. Murphy’s comments underscore the uncertainty facing the retail sector.
Michael Murray, CEO of Frasers, described the Budget as a substantial setback, equating it to a ‘punch in the face’ for retailers. He expressed concerns over both increased costs and diminishing consumer confidence, foreseeing at least £50 million in additional expenses as a direct result of the fiscal measures.
Doug Putman of HMV also raised alarms, indicating that the cost escalation had halted store expansion plans. The boost in National Insurance payments is expected to put significant pressure on operational budgets, making new ventures riskier. This sentiment was echoed by Nish Kankiwala of John Lewis, who called for a reassessment of business rates to mitigate impacts.
Conversely, some retail leaders view the Budget as an opportunity. Joe Wykes of Jollyes embraces the Budget’s challenges, committed to investing in people and infrastructure despite the looming financial strains. He criticises competitors for attributing price rises to the Budget, viewing it as an excuse for profiteering.
Rami Baitieh from Morrisons and Richard Walker of Iceland also acknowledge the Budget’s challenges but focus on adapting to these changes. They advocate for strategic investment in future growth and emphasise the importance of government spending on long-term solutions such as skills development.
The Budget continues to polarize the retail sector, with leaders divided on its impact and potential opportunities.
