New blow as retailers warn of price hikes and job cuts

Keir Starmer faces a fresh Budget headache as retailers warn of higher prices and job cuts following disappointing sales in the crucial Christmas "golden quarter".

- HOWARD MUSTOE

The British Retail Consortium and global accounting firm KPMG said costs are projected to eclipse sales growth this year, forcing traders to pass higher prices onto consumers.

BRC chief executive Helen Dickinson said the crucial quarter between October and the end of December had “failed to give 2024 the send-off retailers were hoping for” after a year she said was marked by weak consumer confidence and difficult economic conditions.

She said the BRC and KPMG projected sales growth to average 1.2 per cent in 2025, below the projected shop price inflation of 1.8 per cent.

“This means volumes are likely to fall this year, all while the regulatory and tax burden on retailers will increase costs by £7bn from rising national insurance contributions, increasing national living wage, confirmed in the Budget, and new packaging levies,” she said. “With little hope of covering these costs through higher sales, retailers will likely push up prices and cut investment in stores and jobs, harming our high streets and the communities that rely on them.”