M&S Boss Warns Budget Will Shrink UK Retail as Historic Department Store Closes

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Marks & Spencer’s chief executive, Stuart Machin, has issued a stark warning that the Government’s Budget policies risk shrinking the UK retail sector, reducing jobs, and slowing wage growth. Writing in *The Sunday Times*, Machin criticized the Government’s approach, arguing that the industry is being “raided like a piggy bank” and calling on Chancellor Rachel Reeves to revise her tax plans.  

 

“The blunt truth is, left how it is, the Budget means UK retail will get smaller,” Machin wrote. “At M&S we are growing, but others are not, and there is no doubt that there will be fewer jobs, fewer shops, and slower wage growth across the sector as a whole.” He emphasized that the retail sector is already under immense financial strain and that the Government’s tax policies are exacerbating the situation. “Retail is being raided like a piggy bank and it’s unacceptable,” he added.  

 

Machin’s concerns echo those of other business leaders who have warned that rising employment costs and tax increases will squeeze the industry. Last week, car dealership Vertu Motors blamed Budget-related cost increases for impending job cuts, announcing that it would shut most of its showrooms on Sundays to offset financial pressures.  

 

 

The M&S chief, who has led the company since 2022, was particularly critical of what he described as “ill-thought-through decision-making” in the autumn Budget. “The Employment Rights Bill means we would have to say no to a colleague usually working weekend hours who requests more shifts, and the change to the national insurance contributions (NICs) threshold will hit part-time workers hardest,” he said.  

 

The impact of these policies is already being felt, with one of the UK’s oldest department stores, Beales, announcing that it will close its last remaining shop. The retailer, which first opened in Bournemouth in 1881, will cease trading at its Poole branch in May, blaming rising costs linked to Budget tax and wage increases.

 

 

Retail industry leaders argue that Beales’ closure highlights the severe consequences of higher national insurance contributions and the upcoming minimum wage increase, which takes effect in April. Tony Brown, Beales’ boss, described the store as having become “unviable” due to the cost rises announced in Labour’s October Budget and “the risks and uncertainty of further tax increases.”  

 

Beales had already been struggling with shifting consumer habits, as younger shoppers increasingly favor online retailers over traditional high street stores. However, Brown stressed that recent Government policies have made survival impossible.  

 

The British Independent Retailers Association (Bira) has warned that Beales may be just the first of many closures, as retailers across the country battle mounting costs. Jeff Moody, the association’s commercial director, expressed his concern over the broader impact on the industry. “We are deeply saddened to learn of Beales’ closure,” he said. “This is not just the loss of another shop – it represents the end of a retail institution that has served communities for nearly one-and-a-half centuries. This closure starkly illustrates the devastating impact that recent tax increases are having on our retail sector.”  

 

As the retail industry braces for further financial strain, Machin and other business leaders are urging the Government to reconsider its approach before more stores follow Beales in shutting their doors.

 

Based on a report by The Independent | Daily Mail 2025-02-14