A heavyweight group of retailers has warned the Treasury that hundreds of thousands of jobs are at risk in the retail sector due to unsustainable cost hikes this year.

It’s the latest in a long string of warnings from the retail sector, which has been vocal about the coming damage to jobs and investment on the British high street.

The Retail Jobs Alliance (RJA), which includes Tesco, Marks & Spencer and B&Q-owner Kingfisher, warned that retailers are facing “a perfect storm” of additional costs from this April.

It said a higher national insurance bill, plus a new recycling tax and higher business rates, will see 300,000 jobs disappear by 2030.

Chief executive of M&S, Stuart Machin, said over the weekend that “retail is being raided like a piggy bank and it’s unacceptable”.

“The blunt truth is… the budget means UK retail will get smaller,” Machin wrote in The Times, adding that while Reeves’ long-term growth ambitions are welcome “action [needs to be] taken to encourage growth today”.

Andrew Griffith, Shadow Business Secretary, said: “Retailers are often the canary in the coalmine of the state of the economy. For major high street names to issue this stark warning shows that no one’s economic future is safe.

Although the Labour’s cabinet has no real experience of business, surely, they must heed the warnings and change course now.”

Retail’s ‘permacrisis’

Retail has had a rough ride since the financial crisis of 2008, with a combination of online shopping, a Covid-19 hangover and high taxes all compounding the issue, according to the Centre for Retail Research (CRR) with around 85,000 shops having closed since 2018.

With many out of the habit of high street shopping, shops have been struggling with a lack of in-store customers – even by early 2023, customer footfall was 10 per cent lower than in 2019, and in major cities the effect was more pronounced.

Brits have instead turned to experiences like meals out, city breaks, gym memberships and subscriptions to streaming services, leaving less to spend in shops.

Analysts and companies alike have argued that changes announced in the budget are only set to make the issue worse, with an already-high tax bill set to rise by £4.5bn, according to the British Retail Consortium (BRC).

The BRC attributed £2bn of this to the new packaging levy and £2.33 to higher national insurance contributions (NICs).