Lidl, Tesco, Asda and Marks and Spencer issue 'price rise' warning

Lidl, Tesco, Asda and M&S have issued a warning following the autumn Budget tax increases. Lidl GB chief executive Ryan McDonnell said the discount supermarket chain is expecting to face “tens of millions of pounds” in extra costs as a result of a raft of changes launched by Chancellor Rachel Reeves last month.

Ms Reeves revealed a £25.7 billion change to employers’ national insurance contributions (NICs) in the Budget, which would increase the rate of the tax and reduce the threshold at which firms must pay. Retail businesses will also come under pressure from other policy changes, including packaging levies and increases to the national minimum wage.

Lidl was among major retailers – also including Tesco, Asda and M&S – who warned the Chancellor that jobs will be cut and prices will have to rise as a result of the impact.

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Mr McDonnell said: “There is a lot of impact that we will have to negotiate and I think the letter shows that the industry is reeling a lot. We are talking about £7 billion for the whole industry. For us it will be somewhere in the tens of millions.”

He said that the jump in costs will result in “greater inflationary pressures” but stressed that it will “maintain market-leading pricing”. It came as Lidl revealed a surge in sales for the past year as the German discounter saw a raft of shoppers switch from rivals amid pressure on household budgets.

The retailer, which first launched in the UK 30 years ago, has expanded to run more than 960 stores. It is now the UK’s sixth-largest grocery chain and has continued to increase its share of the market in recent months, according to data from Kantar.

The supermarket group said it has benefited from a continued store expansion programme, with plans to open 18 more stores in the “next few months”.