UK (Parliament Politics Magazine) – Sainsbury’s CEO Simon Roberts warns Reeves against tax hikes on retailers, citing inflation risks, while reporting profits and plans for major store expansion.
As reported by The Guardian, the head of the UK’s second-biggest supermarket has urged Rachel Reeves not to raise taxes on retailers, warning that shoppers are holding back spending.
How did Simon Roberts warn about tax, inflation, and delayed spending?
Simon Roberts, who also owns Argos and Habitat said his customers were
“going to be cautious on discretionary spending, not least because of uncertainty out there and [household] budgets are tight.”
He said Argos launched its Black Friday deals earlier than last year to encourage shoppers, noting that some were holding back amid potential tax increases.
Mr Roberts warned that food price inflation may not yet have reached its peak.
The supermarket’s CEO said,
“The inflationary pressures on cost base have been significant this year … What we don’t want to see [in the budget] is further impacts that may cause further inflation. No one wants to see inflation go any higher.”
He highlighted a £140m rise in the retailer’s employer national insurance costs and new regulatory rules, adding these amounted to “tens of millions of pounds.”
Mr Roberts said,
“We have had to work really hard as an industry and a business at Sainsbury’s to contain those costs.”
The CEO added that supermarket chains are urging the government to avoid raising business rates on large stores.
Mr Roberts slammed government tax plans and revealed Sainsbury’s will open a new supermarket each month for the next 18 months, raising profit expectations above £1bn.
He stated,
“Our offer has never been stronger. So while we expect the market to remain highly competitive, our momentum gives us real confidence as we head into Christmas and we have strengthened our profit guidance today.”
How is Sainsbury’s planning expansion while managing inflation risks?
According to analysts at Shore Capital, Sainsbury’s profit forecast was raised by £20m to £1.02bn.
The firm revealed a £250m special dividend to shareholders after selling its bank for more than £400m, exceeding expectations. The retailer confirmed plans to use £150m for share repurchases, providing another way to return funds to investors.
When questioned about new taxes potentially fueling inflation while Sainsbury’s paid out over £400m to shareholders, Mr Roberts said the retailer had invested £1bn in lowering prices and £500m in wages over the past five years.
He added,
“It is about making sure we get the equation right for all our stakeholders.”
Britain’s second-largest grocer reported a 4.8% rise in sales to £15.6bn in the six months to 13 September, driven by a 5.2% increase in grocery sales despite a “highly competitive” market.
The retailer reported a 5% rise in pre-tax profits to £271m for the half-year, after £69m in one-off costs tied to store restructuring and the closure of cafes and deli counters.
The company said it opened six supermarkets in the half-year and plans to open another six by March, followed by 12 more next year, marking its largest store investment in a decade.
What did Rachel Reeves say about upcoming tax rises in her budget?
Chancellor Rachel Reeves warned of major tax increases in her Budget, saying, “we will all have to contribute” to Britain’s future.
She said,
“I will do what is necessary to protect families from high inflation and interest rates, to protect our public services from a return to austerity and to ensure that the economy that we hand down to future generations is secure with debt under control.”
Ms Reeves stated,
“If we are to build the future of Britain together, we will all have to contribute to that effort. Each of us must do our bit for the security of our country and the brightness of its future.”
The chancellor added,
“We’ve got to do the right things. The problem of the last 14 years is that political expediency always came above the national interest, and that is why we are in the mess that we are in.”
Referring to her resign over tax increases in the Budget, she said,
“I am not going to walk away because the situation is difficult. I was appointed as chancellor to turn our economy around, and I’m absolutely determined to finish that job.”
The UK 2025 Budget is expected to include an increase in income tax and possible cuts in National Insurance, targeting pensioners, landlords, and the self-employed.
Ahead of the Budget, the chancellor warning over increasing tax hikes.
