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The boss of Marks & Spencer has accused the government of raiding retailers “like a piggy bank” as the sector is hit with tax rises, wage increases and recycling levies.
Writing a column in The Sunday Times, Stuart Machin said M&S was “transforming” with its “gaze firmly set on the future”.
And while he acknowledged that Chancellor Rachel Reeves had a “extremely precarious” balancing act to perform, he warned her budget risked stifling future growth by burdening the retail sector with extra costs.
Machin added the sector was the country’s biggest private sector employer and its engine.
“The blunt truth is, left how it is, the budget means UK retail will get smaller,” he wrote. “The sector already pays an effective tax rate of 55% and the chancellor’s budget will add £7bn of extra employment costs and an increased packaging levy to a sector working on margins of 3%-5%.”
Machin requested that Reeves pivots in four areas: phasing the timing of the NI contribution threshold decrease over two years; delaying the increase in EPR fees and pausing Defra circularity recycling schemes; rethinking business rates; and ensuring Defra works “with the sector and not against it”.
Morning update
Lidl has announced a “market-leading” pay increase for 28,000 hourly-paid colleagues, with new rates coming into effect in March 2025.
Entry-level pay will rise to £12.75 nationally, up from £12.40 and increasing to £13.65 with length of service. Meanwhile, in London, new starters will see pay rates go up to £14, increasing to £14.35 over time.
These new hourly rates come in ahead of the government’s updated national living wage in April, exceeding it by more than 50p.
This week in the City
It’s The Grocer/Retail Week Live conference this week in London.
And it looks to be a busy week on the markets.
Tomorrow kicks off with the latest retail sales figures for January from BRC-KPMG. On the stock exchange, Imperial Leather and Carex owner PZ Cussons is set to publish annual results, while drinks giant Coca-Cola will issue Q4 results over in the US.
On Wednesday, Dutch brewer Heineken follows rival Carlsberg last week in publishing its Q4 figures, while European supermarket chain Ahold Delhaize and Kraft Heinz also put out quarterly numbers.
Super Thursday sees Unilever filing full-year results in London, while rival Nestlé also posts Q4 and annual figures. Bottler Coca-Cola HBC will also publish full-year results, and there is a trading update due from Tate & Lyle and quarterly results from Molson Coors. Thursday also brings full-year results from British American Tobacco.
Coca-Cola Pacific Partners rounds out the week on Friday with annual results.
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