Asda chair Lord Stuart Rose has admitted that the upcoming £100m rise to the supermarket’s tax bill following changes announced in the Budget last week was “not an easy swallow”.
Among the changes brought in by Chancellor Rachel Reeves’ first Budget is a rise in employers’ National Insurance contributions from 13.8% to 15% on a worker’s earnings above £175 a week, effective April 2025.
Rose told Retail Gazette’s sister publication Grocery Gazette: “Is it inflationary? Possibly. Is it going to put pressure on the business? Yes.
“Are we as an industry, not just Asda, very efficient? Yes, we always find ways of making things work, because we want to make sure that we give our customers the best possible offer. But it’s tough, the industry has been hit hard.”
It comes as Sainsbury’s chief executive Simon Roberts has warned that the £140m extra piled onto its bill will lead to “some difficult decisions” as there “just isn’t the capacity to absorb all of this”.
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Rose’s comments come as Asda revealed it was investing an additional £13m in store hours over the golden quarter to drive further improvements across the business after posting a 2.5% drop in its third quarter sales to £5.3bn.
Rose said: “We’ve been going through a hell of a lot of transformation. We’ve doubled the size of our store footprint over the last couple of years, we’ve added a convenience business, we put Asda Rewards out.
“We’ve made significant progress on the transformation programme, weaning ourselves off the Asda platform. But it has meant, frankly, that we probably have been a bit distracted from looking after the day job, which is our customers.
“So we’ve addressed this as a top priority, making sure that stores are better facing in terms of their customers, making sure availability is top of our project, making sure that our pricing strategy is correct and we think we’re doing the right things, and customers are beginning to respond to the fact that we are investing in our stores.”
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