The measures announced in the Budget will cost one of the UK’s largest supermarket chains £140 million, its chief executive said.
Increase in employer National Insurance contributions, announced by the Chancellor Rachel Reeves In its budget last week, it will cost Sainsbury’s £140m as of April, said chief executive Simon Roberts.
No price has been set for the increase in the national minimum wage, but Roberts said the new measures would trigger it Economic inflation – The rate of rise in prices in general – to rise.
The supermarket chain, the UK’s second-largest by market share, does not have the “capacity to absorb” the “barrage of costs”, Roberts said, so customers will have to pay more.
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He pointed to analysis by the independent forecaster Office for Budget Responsibility (OBR) which said Ms Reeves’ announcements would be… Cause high inflation Than he originally expected, saying it was “hard to disagree with him.”
“This impact on National Insurance was unexpected and coming quickly, and will have a very significant impact, impacting our cost base… and our suppliers’ cost base,” Roberts said.
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When asked to measure the inflationary impact of minimum wage increases and increases in National Insurance contributions, Roberts said inflation was already rising, and there was “a lot of pressure in the way… there is pressure in the system in inflation already”.
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What was expected was a cut in business rates, Roberts said: “Business rates are going to go up this year, and I certainly didn’t expect them to go up next year, I expected them to go down.”
What does it mean for employees?
When asked about the impact it could have on Sainsbury’s workforce, Roberts said the company had “difficult decisions to make as a result” but that it was “too early to say”.
Earlier this week, JD Wetherspoon, which owns more than 1,000 pubs across the UK, said the budget would add £60m in costs next year, while M&S expects to receive £120m.
Change habits
Sainsbury’s also announced on Thursday morning the return of the ‘super weekly shop’ as people return to their offices.
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Roberts added that as a result of rising restaurant prices, people are eating at home more.