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BRC blasts "cumulative burden" of Budget
November 20, 2024
UK retailers face £7bn of extra costs which will cause shop closures and price rises according to a letter signed by 70 of leading stores group who are asking the Government to reconsider its Budget plans.
The British Retail Consortium, led by Helen Dickenson (pictured left), has drafted a letter to the chancellor which has been signed by 79 retailers including Asda, Boots, Currys, Lidl, Marks and Spencer, Primark, and Sainsbury's.
It says: ""The sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable, and higher prices a certainty."
It added that with profit margins typically between 3% and 5% in the sector it would "not be possible to absorb such significant cost increases over such a short timescale. The effect will be to increase inflation, slow pay growth, cause shop closures, and reduce jobs, especially at the entry level."
The HM Treasury said the government had had to "make difficult choices to fix the foundations of the country".
From next April, all large businesses will have to pay higher National Insurance Contributions (NICs) for every member of staff they employ. Employer NICs will start at a lower threshold than now – at £5,000 instead of £9,100. And the rate will rise from 13.8% to 15%. The BRC calculates this will cost British retailers £2.33bn a year.
The rise in the minimum wage from April is set to cost the sector a further £2.73bn, the BRC letter said and packaging levies could add a further £2bn.
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