Workers ‘risk destroying high street’: Retailers say Reeves budget will mean store closures, job cuts and higher prices

Lidl’s boss has said the retail industry is “floundering” over the Budget amid warnings it will lead to the “destruction” of the High Street.

Lidl GB chief executive Ryan McDonnell said increases in national insurance, wages and business rates will cost it “tens of millions” of pounds and could drive up prices.

The supermarket was one of more than 80 high street chains, including Tesco, Marks & Spencer and Boots, which signed a letter this week warning chancellor Rachel Reeves that stores will close, jobs will be lost and prices will rise as a result of your Budget.

The letter warned that the industry faces a £7bn hit. And today, the head of the British Association of Independent Retailers warns that many businesses “fear for their own survival”.

Andrew Goodacre, whose 4,500 members range from garden centers to department stores, says the Budget “has sent shivers through the entire retail and hospitality industry”.

In his article in the Mail, he warns that Reeves risks “creating the very destruction of the High Street” that Labor says it wants to avoid and calls for proposed increases in business rates to be reversed.

He says: “The street shops can’t take it anymore.”

His comments come after UK Hospitality, an industry group representing 130,000 establishments including bars, restaurants and hotels, said yesterday that the Government must “urgently rethink” the increase in National Insurance to curb rising inflation and looming losses. of employment.

Last month, Reeves raised the National Insurance rate employers pay on staff salaries from 13.8 per cent to 15 per cent and reduced the threshold at which businesses start paying it from £9,100 to £5,000.

This disproportionately affects retailers as they employ many people on part-time contracts.

The £25bn tax raid came alongside minimum wage rises to combat inflation, higher business rates and new rights for workers that will cost employers £5bn a year.

Lidl boss McDonnell said the higher cost package “poses a challenge” for its 960 UK stores.

“We will have to negotiate a lot of repercussions,” he said. ‘The industry is reeling. We’re talking about £7 billion for the entire industry. For us it will be tens of millions.’

Despite the blow, he said Lidl was on course for “our biggest Christmas ever”, having won buyers from its rivals.

The comments came as accounts showed Lidl GB’s revenue rose 16.9 per cent to £10.9 billion last year, while it hit a profit of £43.6 million, after having lost £76 million the previous year.

• The workers face redundancy as part of plans by private equity-owned supermarket Morrisons to close its Rathbones bakery in Wakefield with the loss of 378 jobs.