Asda, Primark, Sainsbury’s and M&S issue urgent price rise warning

Major UK retailers including Asda, Primark, Sainsbury’s and Marks and Spencer have warned they’ll need to look at price rises in the wake of Labour’s controversial employers’ National Insurance hike.

The bosses of some of the nation’s biggest high street chains have said the tax raid unveiled in the government’s Budget last month will cost them millions of pounds – and may mean they have to cut costs and pass shortfalls on to consumers, The Sun reports.

Stuart Rose, chairman of Asda, claimed the increase would cost the firm £100million and bring inevitable price increases.

He said: “You cannot absorb £100milion of cost. We don’t have a magic money tree in Leeds.”

Sainsbury’s CEO Simon Roberts previously warned the chain, which has over 1,400 stores across the UK, can’t absorb “this level of unexpected cost inflation”, following Chancellor Rachel Reeves‘ announcement in her Autumn Budget.

He predicted a rise in National Insurance for businesses would cost the firm £140million and “feed through into higher inflation”.

Meanwhile, George Weston. the CEO of Primark parent company Associated British Foods, said he believed “the weight of tax rises” unveiled by Labour last month would be falling on the UK high street, with the company’s NI bill rising by “tens of millions”.

However, he said the firm would try to “hold prices”, though increased costs would prevent it from slashing prices as quickly as it hoped.

M&S has also warned it faces £120million in extra costs next year as a result of measures in the Budget.

The retailer said it will do “everything we can” to avoid customers bearing the costs through price increases, as per the outlet.

Tim Martin, the boss of pub chain Wetherspoon, was also among business leaders sounding the alarm, but saying: “All hospitality businesses, we believe, plan to increase prices, as a result,” but added the firm “will, as always, make every attempt to stay as competitive as possible”.

Last month, Reeves announced that employers’ National Insurance contributions will rise by 1.2 percentage points to 15% in April 2025, and the threshold for paying them will fall from £9,100 per year to £5,000, the Chancellor has announced.

The move is estimated to add around £25billion to the Treasury’s coffers, the equivalent of around £800 per employee for each company.

Addressing the House of Commons on October 30, she said: “I am today increasing the Employment Allowance from £5,000 to £10,500. This means 865,000 employers won’t pay any National Insurance at all next year, and over one million will pay the same or less as they did previously.

“This will allow a small business to employ the equivalent of four full-time workers on the national living wage without paying any National Insurance on their wages.”

Reeves has since admitted that employees may be impacted by the NI changes, but told the BBC‘s Laura Kuenssberg on Sunday that “we’ve got to raise the money to put our public finances on a firm footing”.