Customers to suffer while shareholders cream the profits

Tesco has threatened to hike prices in response to the government’s Autumn budget. It says tax changes will cost the supermarket giant £1 billion. Meanwhile, shareholders are set to pocket a slice of a staggering £2.9 billion this year.

In October, Chancellor Rachel Reeves announced higher wages for the lowest-paid workers and increased contributions required from employers for National Insurance. 

In a letter representing high street staples including Boots, Currys, M&S, Asda and Primark, the British Retail Consortium (BRC) said: “The effect will be to increase inflation, slow pay growth, cause shop closures, and reduce jobs, especially at the entry level.”

In a further attack on poorer people, the British Retail Consortium said it will be the lowest-paid jobs that go first.

Other household names are wading in too. Wetherspoons boss Tim Martin says restaurants and pubs like his will pass on extra costs. The low-cost pub chain recorded profits of £36 million for the first six months of this year – an eight-fold increase on 2023.

Andy Higginson, chair of JD Sports, (and also chair of the BRC), said he ‘guarantees’ inflation on prices. He called on the government to phase in the changes so “the economy has time to absorb these changes”. The company is projecting profits this year of at least £955 million.

Businesses say they keep the country fed and workers employed but sympathy will be in short supply from struggling consumers. Customers will ask why profits for shareholders are more important than protecting them from rocketing prices and job losses. 

Quids in! says: For the fat cats, there’s a choice: Cut profits passed onto shareholders or protect consumers. It seems that among corporates there’s a culture of entitlement, not enterprise.

Image:  I Wei Huang / Shutterstock