Currys price rises ‘inevitable’ after £32m autumn budget hit

Currys’ impending price rises are “inevitable” ahead of a £32m hit from changes announced in the autumn budget, the retailer told shareholders on Thursday.

Currys said “some” price rises are on the way as he detailed £12m of additional national insurance contributions and £9m in new staff costs linked to increases to the national living wage.

The retailer is the latest company to lash out against the changes, which have led to warnings of higher prices, store closures and job cuts when they come into force from April next year.

Currys chief executive Alex Baldock criticized “new and unwanted government policy headwinds”, which he said would “rapidly and materially add costs, depress investment and hiring, drive automation and offshoring , and would make some price increases inevitable.

In addition to the direct financial impact of changes to employer contributions to national insurance and the national minimum wage, Currys said it will see a £9 million impact from “the passing on of these costs by some of our subcontracting partners”.

It also faces a £2 million rise due to inflation-based increases in business taxes, Mr Currys said.

But the additional costs failed to dampen investor enthusiasm, as curry stocks soared 12.2 per cent to 88.65 pence, taking one-year gains to almost 95 per cent.

However, the stock is down about 40 percent over the past five years.

It came as the group reported 2 per cent revenue growth in the comparable half-year to £3.9 billion, as 6 per cent growth in the UK and Ireland offset continued decline in the Nordic countries.

Adjusted profits soared 55 per cent to £41m as Currys reported strong growth in stores and online in the UK and Ireland.

Mark Crouch, market analyst at eToro, said: ‘Currys’ interim results suggest the home electronics retailer has made a firm move.

“After recently dealing with falling profits and a weakened balance sheet, the company is in a much stronger position today.”

Currys boss Baldock also highlighted the retailer’s 75 per cent UK market share in the emerging AI-powered laptop market, where he said the group was seeing growing demand.

“AI is a trend that still has a long way to go,” he added.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: ‘The integration of Artificial Intelligence into consumer electronics may herald the beginning of an upgrade cycle.

‘So far everything is going well, but the figures for the first half of the year only go up to the end of October. The real test will be the upcoming results, which will highlight demand during the important Christmas period.’