M&S is searching for new cost-saving measures to pay the extra £60m piled upon its National Insurance bill following changes introduced in last week’s Budget.
CEO Stuart Machin said the business plans to manage this new expense through finding savings rather than raising prices for consumers.
“We don’t want to pass on these costs to our customers. We want to maintain where we are,” he stressed.
Machin explained that while M&S had anticipated some impact from National Insurance changes, the “double whammy” of increased rates and the lowering of the pay threshold on which employers start paying the tax has piled added pressure on the business.
The additional £60m comes on top of the £108m M&S paid last year in National Insurance.
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Machin said he was keen not to pass these costs on to consumers through increased prices as it seeks to maintain its value credentials.
“We’ve got a good track record of absorbing inflation…We don’t want to put these price rises through.
He added: “We’ve got the best value perception we’ve had in a decade…I do not want to risk that…What we want to do is look at those extra headwinds and see how we can also offset that with cost reductions.”
M&S’ improved value stance helped the retailer’s profits surge in its first half. Profit before tax and adjusting items was up more than 17% in the half ended 28 September, hitting £407.8m.
Both clothing and food delivered their fourth consecutive year of market share growth.
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