TROLLEY BASH
Budget has wiped more than £1billion off Britain’s biggest high street names
Firms are also facing millions of pounds in extra costs from Labour’s workers’ rights reform
MORE than £1billion has been wiped off Britain’s biggest high street names as investors digested the Budget’s hit of higher employment costs.
The move to hike employers’ National Insurance Contributions is set to hit the retail sector — which analysts say will hurt profits.
4
On a gloomy day for the markets, B&Q owner Kingfisher slipped by 5 per cent while home furnishings firm Dunlem shed 4.39 per cent.
Currys fell 3.17 per cent and even Next was down 3.88 per cent — one day after saying its profits would top £1billion.
Sainsbury's was the only gainer, up 0.68 per cent, after it revealed that it would make £700million selling its Argos finance arm.
Helen Dickinson, of the British Retail Consortium, said retailers faced a £2.3billion increase in National Insurance Contributions and a £367million hike on National Living Wage increases.
READ MORE ON THE BUDGET
They are also facing millions of pounds in extra costs from Labour’s workers’ rights reform.
Investec analyst Kate Calvert said labour cost rises and the knock-on impact of inflation are “worse than expected”.
The Office for Budget Responsibility said 76 per cent of the increased costs would be passed on by employers to staff through lower real wages.
Shirine Khoury-Haq, of the Co-op, said: “Difficult choices have been announced which will have a significant impact on our business in the coming years.”
Most read in Business
Retailers will also be paying £140million more next year in higher business rates bills, which Chancellor Rachel Reeves said she will eventually tackle with reform during 2025.
The long-awaited overhaul is set to be focused on companies with the most expensive properties — offsetting cheaper rates for smaller high street chains.
Eight key takeaways from Labour's budget
Growing pains for Castore
4
4
BRITISH sportswear brand Castore, which has Everton among its partnerships, has slumped to its first loss in years despite its sales jumping by two-thirds.
The business, which counts tennis ace Sir Andy Murray and the billionaire Issa brothers as investors, posted a loss of £28.9million for the year to February, compared with profits of £14.7million in the previous year.
Castore has invested in more stores, warehouses and staff as it adds partnerships including England Cricket and Oracle Red Bull in Formula One.
The firm said: “We’re excited to push the boundaries of sportswear even further.”
Shell of a hike
SHELL has called for clarity after Labour confirmed plans to raise a windfall tax on North Sea oil and gas firms.
Chancellor Rachel Reeves said she would raise the energy profits levy from 35 per cent to 38 per cent.
Shell said: “We look for policies that provide certainty. We invest over the long-term.”
It came after the oil giant posted £4.64billion earnings for the last quarter, beating forecasts of £4.13billion. But earnings are down 3.1 per cent from 2023, partly due to low Brent crude prices.
Drinkers reject a pricy pint
4
TWO of the world’s biggest beer giants have admitted that drinkers can no longer stomach their increasingly expensive pints.
Budweiser and Carlsberg both outlined how they were rethinking their strategies to combat changing demand.
It followed news that Budweiser’s total beer volumes fell by 3.1 per cent in the third quarter compared to the previous year.
The brewer, which also owns Stella Artois and Corona, said total revenues were still 2.1 per cent higher due to higher prices and customers opting for premium craft beers, such as its Camden Hells range, but in smaller quantities.
Carlsberg also said it would focus on its cheaper brands after beer sales shrunk by 1.3 per cent. The average price of a pint of Stella is now £5.47, while a pint of Carlsberg is £4.25.
Boss Jacob Aarup-Andersen said: “The average consumer’s holding back.”
Argos card deal
SAINSBURY’S has sold its Argos credit cards business for £720million as the supermarket gets back to the basics of flogging groceries.
The deal with financial services firm Newday comes just five months after Sainsbury’s sold its banking business — which provided credit cards and loans — to Natwest.
Sainsbury’s said around two million customers have Argos credit cards which they use in around a fifth of transactions at the retailer.
Boss Simon Roberts said the deal was a “milestone”.
Loan scandal stopping cars
CAR-makers including Honda and BMW have suspended deliveries of new vehicles after a shock ruling on loans.
A court said last week that buyers should be told if lenders had given commission to car dealers for brokering finance.
Millions could now be in line for compensation from the scandal, dubbed PPI 2.0 after the insurance protection debacle.
READ MORE SUN STORIES
Big lenders briefly suspended some deals while telling dealerships not to deliver cars amid fears they could face up to £16billion of payouts.
Lloyds scrapped commission payments across its car finance arm.
EU probe for Temu
CHINESE online retail giant Temu has been hit with a probe by European regulators into the sale of illegal products.
The firm, which has an estimated 15.6million UK users, is a big rival to Shein, which recently shifted its HQ to Singapore and is planning to list in London next year.
The European Commission is investigating whether Temu is selling toys and cosmetics that could harm consumers by not complying with EU rules.
Topics