Sainsbury’s chief executive Simon Roberts has urged Chancellor John Healey to avoid increasing employment costs in next week’s Budget, warning that further tax rises could drive up food prices and put pressure on retailers.
Roberts called on the government to prioritise measures that encourage business investment rather than add to the financial burden facing the retail and food industries, The Times reported.
He warned against repeating previous increases in employers’ National Insurance contributions, which have added to operating costs across the sector and contributed to inflationary pressures.
He also acknowledged the challenges facing the Chancellor, but stressed the importance of creating conditions that allow businesses to invest, expand and keep prices affordable for consumers.
Roberts called for greater tax incentives to support British agriculture, including an increase to the annual investment allowance to help farmers invest in technology and improve the resilience of domestic food production.
The budget will be confirmed on October 28, and many retailers continue to lobby the government for relief from rising employment costs and business rates.
The British Retail Consortium has previously called for the threshold at which employers begin paying National Insurance contributions to increase from £5,000 to £6,000 to help businesses recruit and retain staff.
Sainsbury’s raises profit expectations
Sainsbury’s half-year results were revealed this week, which saw underlying operating profit rise 3.6 per cent to £525m, despite a slowdown in sales growth.
The supermarket reported a 2.6 per cent increase in sales excluding fuel to almost £14bn for the 28 weeks to September 12, while like-for-like growth slowed to 1.2 per cent in the second quarter.
It raised the lower end of its full-year underlying operating profit forecast to £1.025bn, with the upper end remaining at £1.065bn.
Roberts also declined to comment on reports that Sainsbury’s had held exploratory merger talks with Morrisons earlier this year, maintaining that the retailer remains focused on its existing growth strategy.
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