THE boss of Primark blasted Chancellor Rachel Reeves’ Budget yesterday — claiming it had added “tens of millions” to staffing costs.
George Weston, chief executive of its owner, Associated British Foods, told The Sun that it will be forced to respond by rolling out more self-checkouts.
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He said: “It’s a tough Budget for the high street and those in the food service industry. We knew taxes were going up, but I think the burden and where they’ve fallen is disproportionate.”
His comments came after Reeves said she would raise £25.7billion from hiking employers’ National Insurance contributions, a move the budget watchdog says is likely to see firms shrink workforces, hike prices and lower future earnings for staff.
He said “We’ll redouble our efforts to keep costs down and protect profit margins and one way we can do that is using more self-checkouts.”
He said Primark’s aim would be to “hold prices” rather than cut them as fast as it had hoped.
He reasoned, however, that the budget fashion retailer could benefit from the minimum wage hike as low earners would have more to spend.
He said: “If money is transferred to less affluent shoppers, Primark tends to benefit disproportionately”. He branded “ill-judged” the Chancellor’s plans to increase business rates on those with the most expensive properties to afford reductions for smaller shops and pubs.
He said: “It’s a curious move to increase the tax burden on the anchors of the high street and shopping centres who drive footfall to towns.”
Despite the tough choices, Primark is one of retail’s strongest names.
Total sales lifted 6 per cent to £9.4billion in the year to September 14, while operating profits jumped 53 per cent to £1.1billion.
UK sales grew only 2 per cent due to the washout summer.
The results vindicated Primark’s resistance to joining the online bandwagon.
Instead, it is rolling out click and collect counters. It said digital orders had the benefit of driving more shoppers to its stores.
ASTRA £15BN FALL
SOME £15billion was wiped off the value of drug giant Astrazeneca yesterday amid claims its top bosses in China are being investigated over medical insurance fraud.
Shares slumped by 8 per cent to £101.38, its biggest fall since March 2020.
The drop prompted the firm to issue a stock market statement saying it will not comment on “speculative media reports”.
Last week it admitted its Chinese division president was helping with an investigation. It was yesterday suggested the probe has widened.
PAIN IN THE ASOS
LOSSES at Asos have widened by almost a third to £379.3million as the online retailer continues to grapple with the hangover from its lockdown binging.
Asos is writing off £100million-worth of unwanted clothing.
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The company was left with a £1.1billion stock mountain after being over-optimistic that rapid growth would continue once Covid restrictions ended.
Its core base of young shoppers do not want last season’s fashion trends, meaning Asos has had to discount heavily to reduce the stockpile to £520million.
Boss Jose Antonio Ramos Calamonte said the troubled business was taking “the medicine needed to put Asos on the right path”.
Annual sales slumped by 16 per cent to £2.9billion.
Mr Calamonte also confirmed Asos is launching a Topshop website and considering opening standalone stores after selling a majority stake in the brand.
ELECTRIC IN LEAD
ELECTRIC vehicles were the only area of growth for the car industry last month — but the jump is still not enough to hit this year’s net zero target.
Hefty discounting saw 29,800 sold in October, 24.5 per cent up on last year.
But annual electric car sales were at 18.1 per cent of the market, shy of the Government’s 22 per cent target.
Meanwhile diesel sales slumped by 20.5 per cent and petrol fell by 14.2 per cent.
The overall six per cent fall in sales represents a £350million hit to the industry.
VODA AND THREE ‘TO BE ONE’
AN £18BILLION mobile merger between Vodafone and Three could finally go ahead if they agree to pegging prices for three years and rapidly rolling out more 5G networks.
The competition watchdog yesterday cleared the path for the deal, 17 months after the merger was first announced in June 2023. It comes after the Government said the competition regulator should be more mindful of how it impacts economic growth.
Kester Mann, telecoms analyst at CCS Insight, said: “Vodafone and Three can tentatively order in the champagne.” Stuart McIntosh, of the Competition and Markets Authority, said: “We believe this deal has the potential to be pro-competitive if our concerns are addressed.”
In September the CMA had warned it was worried consumers could be harmed by higher prices from the deal, which reduces the number of mobile players from four to three.
TICK FOR LINK-UP
MIDDLE-class favourite John Lewis has announced a partnership with buy now, pay later firm KLARNA.
John Lewis homeware sales were hit after the cost of living crisis made many shoppers put off big purchases.
It said the deal would “make it easier for customers to manage their budgets and help attract a new customer that may have not traditionally shopped with us”.
Charities have warned buying on “tick” can encourage people to spend too much.
