Morrisons CEO Rami Baitieh warns of an ‘avalanche’ of costs due to recent Budget changes, urging the UK government to stagger these financial burdens.
- The changes include a rise in business rates, National Insurance, minimum wage, and new packaging levies, significantly impacting retailers.
- Baitieh compares the situation to a rapid escalation of pressure, requesting phased implementation rather than immediate impacts.
- Retailers, including major supermarkets, have expressed concerns over potential job losses and price hikes due to these compounded costs.
- A collective industry letter highlights the £7bn annual cost surge expected, pressing the need for government intervention.
Morrisons CEO Rami Baitieh has publicly addressed the UK government, expressing concerns over what he describes as an ‘avalanche’ of Budget-related costs that retailers are currently facing. These include increased business rates, changes to National Insurance contributions, a rise in the minimum wage, and new packaging levies. Such combined pressures, he argues, could lead to fewer jobs and higher prices within the sector.
Speaking to a major publication, Baitieh emphasised the severity of these changes, illustrating his point with a metaphor of gradually increasing medication doses, suggesting that a more measured, phased approach might alleviate some of the immediate economic strain. He stated, “The National Insurance change adds insult to injury. The problem is that it’s an avalanche of costs that is coming all at once.”
The financial impact of these measures is notably significant, with the National Insurance changes alone costing Morrisons approximately £75 million. This situation is exacerbated by the fact that the recent Budget decisions were made in the first by a Labour government in 14 years, resulting in particular scrutiny and tension within the sector.
In a concerted effort to address these challenges, more than 70 major retailers, including giants like Tesco, Sainsbury’s, Asda, and Morrisons, have collectively issued a letter to the government. This communication warns that the increased financial burdens could lead to an anticipated yearly cost surge of up to £7 billion within the retail industry, which in turn could result in inevitable job cuts and price increases.
The discourse between retailers and the government continues to develop, as both sides consider the broader implications of immediate economic policy changes versus long-term planning. However, as it stands, the industry remains in limbo awaiting a response to these pressing concerns.
The call for a staggered approach to Budget costs underscores the urgent need for collaboration between the government and retailers.
