Half of UK retailers plan to cut workforce in 2025 - and even more will raise prices
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Two thirds of leading retailers warned they will be forced to hike prices to cope with the increase to National Insurance costs amid mounting pressure on the Chancellor. Two thirds (67 per cent) of 52 chief financial officers surveyed for the British Retail Consortium (BRC) said they would raise prices in response to increases in employers’ National Insurance Contributions from April.
Greggs recently revealed they would be hiking prices during the coming year, while clothing retailer Next said they would implement a one per cent prise rise to offset some of the costs of increased wages and NI contributions. Just over half (56 per cent) said they would be reducing their paid number of hours and overtime, while 46 per cent said they have to reduce headcount in stores and 31 per cent said the increased costs would lead to further automation.
Some 70 per cent said they were “pessimistic” or “very pessimistic” about trading conditions over the coming 12 months, while just 13 per cent said they were “optimistic” or “very optimistic”. The biggest concerns, cited by more than 60 per cent of the CFO’s, were falling demand for goods and services, inflation for goods and services, and the increasing tax and regulatory burden.
The impact of the Budget on wider business investment was also “clear”, the BRC said, with 46 per cent of CFOs saying they would reduce capital expenditure and 25 per cent expecting to delay new store openings. Some 44 per cent of respondents expected reduced profits.
