Currys boss warns of ‘muted’ shopper confidence after Budget tax raid

The boss of Curry’s has warned of a ‘muted’ consumer environment ahead of the key Christmas trading period as higher taxes pile pressure on the business and shoppers.

Chief executive Alex Baldock said he was ‘concerned’ that UK ‘consumers already high tax burden has increased further’ following Labour’s Budget last month.

‘We’re not counting on any improvement in the UK consumer outlook, confidence or spending, looking forward,’ he said.

And the group is facing a double whammy as it also must deal with more ‘unhelpful’ cost headwinds, including higher wages, Baldock added.

The group has been ‘weighed down by the increases in national living wage and national Insurance costs from last year’s government budget’, he said.

If it wasn’t for these taxes, profits ‘would have been up twice as high in the UK’, for the six months to 1 November 1, Baldock claimed.

And he warned that aspects of the employment rights bill would make some jobs in the retail industry ‘unviable’.

Baldock said: ‘The harder, riskier and more expensive you make it to employ people, the fewer people will be employed.’

Retail chiefs, including Next boss Simon Wolfson have already argued that the new rules – which will see workers offered a certain number of guaranteed hours – are not fit for industries reliant on seasonal and temporary work.

Baldock cited analysis from the Retail Jobs Alliance – which also includes major employers Tesco and M&S – which claims the total Government measures will see a reduction in 300,000 retail jobs over the next three years.

Despite the gloom, sales hit £4.2billion over the period, 4 per cent higher than the same timeframe last year, while profits more than doubled to £22million.

Currys shares soared 10.5 per cent to 139.9 per cent by late morning, having added almost 50 per cent since the start of the year. 

Baldock said he expects AI technology and electronic beauty products to be bestsellers this Christmas.

Julie Palmer, managing partner at Begbies Traynor, said: ‘With shoppers tightening their belts, retailers like Currys who provide value and quality along with positive online and instore experience will be able to take the share of sales and loyalty from customers when they do decide to spend.

‘However, even Currys hasn’t been completely immune from the impact of rising colleague and operating costs, though its efforts to drive sales and increase margins will mean it should continue absorbing increases announced in the Budget. Rising rates, minimum wage, and the calling in of unpaid taxes are unlikely to compute with smaller players meaning we may see more shops who cannot afford to adapt shutting down for good.’