M&S faces a £60m increase in National Insurance costs due to Budget changes.
- CEO Stuart Machin confirms plans to find savings, avoiding price hikes for consumers.
- The retailer has a history of absorbing inflation without passing costs to customers.
- M&S recently reported a significant profit increase, highlighting strong value perception.
- The company aims to maintain its market position amidst these financial challenges.
M&S is addressing a significant £60m increase in its National Insurance responsibilities following recent Budget announcements. This increase, attributed to the raised rates and a lower pay threshold for employers, adds to the £108m previously paid last year, intensifying the financial burden on the business.
CEO Stuart Machin has outlined a strategic focus on identifying internal savings rather than transferring these costs to consumers through price increases. “We do not want to pass on these costs to our customers. We want to maintain where we are,” Machin insisted, reinforcing the company’s commitment to sustaining its competitive pricing and customer value.
M&S’s efforts to absorb such financial impacts are underlined by its historical ability to navigate inflationary pressures successfully. Machin highlighted, “We have got the best value perception we have had in a decade,” noting that preserving this standing is crucial for ongoing success.
The company’s recent financial results underscore this strategy’s effectiveness, with a notable rise in profits for the half-year ending 28 September—profit before tax and adjustments rose more than 17% to reach £407.8m. Both its clothing and food sectors reported their fourth consecutive year of market share growth, bolstering M&S’s position in the competitive retail landscape.
The steps M&S is taking further illustrate its dedication to financial stability and customer satisfaction amidst challenging economic shifts.
