Shoppers to face food price hike after Budget’s tax raid on employers, warns Sainsbury’s boss
SHOPPERS will face higher food prices after the Budget’s tax raid on employers, the boss of Sainsbury’s has said.
Simon Roberts, chief executive of the UK’s second biggest supermarket, said the National Insurance hike would cost it £140million.
His comments come after Wetherspoons and Marks & Spencer yesterday warned of a combined £160million hit from the Chancellor’s decision to increase employer contributions.
Mr Roberts said: “It will lead to inflation and it’s pretty clear it’s going to come pretty fast.
“Given the low margins of the industry, there isn’t the capacity to absorb this level of unexpected cost inflation.”
The supermarket chief also expressed his disappointment that the Government had ignored his calls to relieve the extra staffing costs on retailers by finally overhauling business rates.
Retailers will face another increase in the property tax next year while they wait for further details of a promised reform.
He added: “We came out in support of Make Work Pay but on the basis there was a clear commitment on business rates reform, because it is not a fair tax on stores.”
Sainsbury’s pays £500million- a-year on business rates, half of its £1billion annual tax bill.
Yesterday, it posted a 4.7 per cent rise in underlying profits to £356million.
Food sales were up 5 per cent in six months but revenues in the Argos division fell by the same margin.
Boohoo bite-back
BOOHOO has issued a punchy rebuttal to Mike Ashley’s Frasers Group — saying the tycoon’s “continual legal letters and public posturing” is not in shareholders’ interests.
Mr Ashley has demanded a board seat and guarantees that any disposal of online brands would be put to a vote.
Boohoo said it would only consider giving Frasers a seat if it ruled out making a takeover offer or plans to merge it with a rival, such as Asos, which Mr Ashley also has a stake in.
Nissan hits brakes
THOUSANDS of workers at Nissan’s Sunderland site are facing an uncertain future after the Japanese car giant launched a radical plan to cut 9,000 jobs globally.
Nissan slashed its profit forecasts by 70 per cent as it admitted that it had been too optimistic about the demand for battery-powered vehicles and had not produced enough hybrid models.
The car maker said the “severe situation” has prompted it to now cut global production by one-fifth and squeeze £2billion worth of costs out of the business.
Last year, Nissan — which employs 6,000 on Wearside — said it would manufacture three electric models, including an EV Qashqai model in the UK, as part of a government-backed £2billion commitment.
On average, a new Nissan car has been produced at the Sunderland factory every two minutes, every hour of every day, since its opening in 1986.
A broad band of BT cuts
BT broadband bills are set to rise further as the telecom giant counts £100million of extra costs from the Budget.
Boss Allison Kirkby said it may have to offset the increase in employers’ National Insurance contributions through higher pricing, reducing supplier costs or replacing some roles with artificial intelligence.
“It’s a new inflationary pressure that we need to suffer in our business”, she said.
BT already increases bills every year by the rate of consumer inflation, with an additional 3.9 per cent on top — customers were charged an extra 7.9 per cent this year.
Ms Kirkby said that the £100million hit was just 0.5 per cent of BT’s gigantic cost base as it ploughs cash into rolling out fibre broadband.
It posted a 10 per cent fall in half-year profits to £967million and confirmed that 2,000 more jobs had been cut as part of its ongoing plan to reduce the workforce by 100,000.
Home price rise
HOUSE prices have hit a record high according to the UK’s biggest mortgage lender.
Figures from Halifax show the average price of a home in the UK hit £293,999 in October, beating the post-pandemic record of £293,507 in June 2022.
Property prices rose by 0.2 per cent last month — the fourth month of growth in a row.
But Halifax cautioned that mortgage rates staying higher for longer and a hike in stamp duty for first-time buyers could affect the rate of price increases in the future.
ITV pinching pennies
LOVE Island broadcaster ITV plans to make £20million of extra cost savings this year after the hangover of Hollywood writer and actor strikes delayed production revenues.
It posted an 8 per cent fall in third quarter revenues to £2.7billion.
Wood chopper
ENGINEERING firm Wood Group lost almost two-thirds of its value yesterday after it launched an independent review of the business.
The FTSE 250 firm is now worth just £338million after its shares fell by 61 per cent to 48.43p.
In July, Dubai– based Sidara pulled out of a deal that valued Wood Group at £1.56billion.
It added that Deloitte would probe its “contracts, governance and controls”.
Investors fear it will have to make hefty writedowns of the value of contracts.