Two thirds of leading retailers warn Budget will force them to hike 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%) 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.
Just over half (56%) said they would be reducing their paid number of hours and overtime, while 46% said they have to reduce headcount in stores and 31% said the increased costs would lead to further automation. Some 70% said they were “pessimistic” or “very pessimistic” about trading conditions over the coming 12 months, while just 13% said they were “optimistic” or “very optimistic”.
The biggest concerns, cited by more than 60% 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% of CFOs saying they would reduce capital expenditure and 25% expecting to delay new store openings.
Some 44% of respondents expected reduced profits. The survey follows 81 retail chief executives writing to the Chancellor with their concerns about the economic consequences of the Budget, claiming that the industry’s costs could rise by over £7 billion in 2025 as a result of changes to employers’ National Insurance contributions, National Living Wage increases and the reformed packaging levy.
