M&S warns of a £120 million hit from the Budget and cannot rule out passing costs on – London Business News | Londonlovesbusiness.com

The chief executive of Marks & Spencer’s has said they will take more than £120 million hit due to the Chnacellor’s employer national insurance hike.

Stuart Machin said they will do “everything we can” to try and prevent passing on rising costs to their customers, but added he cannot rule out price rises as result of Labour’s Budget.

The national insurance contributions will cost M&S some £60 million from £460 million to £520 million next year.

The Chancellor announced in the Budget to increase the national minimum wage, this will see costs soar by a further £60 million next year.

Machin said, “We’ll do everything we can to make sure that cost is not passed on to consumers.

“It’s not easy but that’s our ambition.”

He then warned the company “cannot rule anything out” as it is still early days and they are working through plans to cut £500 million in costs.

M&S reported on Wednesday in the six months to 28 September underlying pre-tax profits were up 17.2% to £407.8 million.

In their clothing and home division like-for-sales increased 5.3% and the food business was up 7.5%, but the retailer warned of an “uncertain” backdrop in the second half due to cost pressures.

M&S said, “During the first half of the year, cost inflation has continued to be elevated, running well ahead of price inflation and the consumer environment has been uncertain.

“Despite this, the business has traded well, growing volume and value market share.

“As we enter the second half, we expect this backdrop to persist.”

On Wednesday morning shares rose 6%.