Marks & Spencer has cautioned that it cannot rule out raising prices after absorbing an additional £120 million in costs resulting from Chancellor Rachel Reeves’s national insurance (NI) changes and forthcoming wage increases.
Chief executive Stuart Machin stated that the retailer would “do everything we can” to avoid passing these costs onto customers but acknowledged the company is confronting “pretty significant costs to mitigate against.”
M&S expects its tax bill to increase by £60 million next year to around £520 million following the Chancellor’s decision to raise employers’ NI contributions by 1.2 percentage points to 15% from next April, alongside lowering the threshold at which companies begin paying it.
Mr Machin commented, “We planned [for an increase] because it was well noted before the Budget that there was going to be some national insurance increase for business. We didn’t quite see the double whammy coming up.”
In addition to the higher costs from the NI changes, M&S anticipates a further £60 million increase in labour costs due to minimum wage rises—a cost the retailer had already accounted for.
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