M&S CEO warns against mountain of costs facing retailers
M&S CEO Stuart Machin has warned against the mountain of costs facing UK retailers, despite Chancellor Rachel Reeves pushing for growth.
M&S CEO Stuart Machin has warned against the mountain of costs facing UK retailers following the Budget, despite Chancellor Rachel Reeves pushing for growth.
Writing in The Sunday Times, Machin claimed the UK’s retailers were being “raided like a piggy bank”.
He said: “Many of the announcements in Rachel Reeves’s speech last month were commendable — a focus on long-term planning, good ideas to free up investment in infrastructure and a more positive tone.
“But the speech failed to address the significant impact of the budget on the here and now, and at its heart remains a contradiction: long-term growth ambitions are laudable, but they are at risk of remaining only that unless action is taken to encourage growth today.”
He argued: “If the government wants to invest in the future, then lightening the burden that the budget loaded onto the retail sector should be at the top of its immediate action list.”
Machin insisted impacts from the Budget meant UK retail was set to become smaller “left how it is”.
He said: “The sector already pays an effective tax rate of 55% and the chancellor’s budget will add £7 billion of extra employment costs and an increased packaging levy to a sector working on margins of 3-5%.
“While businesses like M&S will fight tooth and nail to hold down prices for customers, the British Retail Consortium and Institute of Grocery Distribution are already projecting food inflation of more than 4%.
He went on: “At M&S we are growing, but others are not and there is no doubt that there will be fewer jobs, fewer shops, and slower wage growth across the sector as a whole.”
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The supermarket boss, who previously pledged to avoid “big job losses” despite the grocer’s cost pressures, cited four key moves where the Chancellor could “get the balance right”.
Machin called on Reeves to phase the timing of the National Insurance Contributions threshold decrease over two years, delay the rise in extended producer responsibility fees and pause and review all Defra circularity recycling schemes, rethink its approach to business rates, and ensure the Defra minister worked with the sector, rather than against it.
Earlier this week, M&S unveiled a host of changes to its leadership team as part of its ongoing transformation of its clothing, home and beauty division.
Current managing director of its clothing & home arm Richard Price will step down following a handover period at the end of April, succeeded by former CEO of Boohoo Group John Lyttle.
The retailer also promoted director of womenswear Maddy Evans to the role of M&S Woman.
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