Fashion retailer New Look is set to accelerate store closures as a result of Labour’s tax hike budget, while ‘chicken king’ Ranjit Boparan fights to pass higher costs on to supermarkets – signaling further pressure on UK businesses across the UK. Multiple sectors.
It is understood that around a quarter of New Look’s 364 UK outlets are at risk of closing when their leases expire, potentially putting hundreds of jobs at risk out of a workforce of around 8,000. Although some closures were inevitable, the pace of fiscal consolidation has It accelerated after the budget announcement in October.
From April, the main rate of employers’ National Insurance contributions will rise to 15 per cent from 13.8 per cent, with the minimum falling from £9,100 to £5,000. The retail sector also faces a 6.7 per cent increase in the minimum wage, to £12.21 per hour, as well as an additional £140 million in business rates from the same date. These measures have forced companies such as New Look to reassess store portfolios and scale back high street operations in a bid to maintain profits.
The same cost pressures are expected to increase food price inflation. Boparan’s 2 Sisters Food Group, Britain’s largest chicken producer, employs 13,000 staff and processes six million chickens a week. Higher staffing costs could add at least £30m to its annual cost base, prompting the company to push supermarkets to pay more. Some industry insiders believe shoppers will see higher prices on shelves within weeks, with many suppliers locking in annual prices early in the year.
Analysts warn that other retailers are likely to follow New Look’s path unless landlords offer significant rental concessions. According to the Center for Retail Research, up to 17,350 stores could close this year – up from 13,500 in 2024 – demonstrating increasing pressure on high streets.
A New Look spokesperson said: “Our store is an important part of our business, along with our website and app. We occasionally close sites due to viability or at the request of landlords. However, we continue to invest in our remaining stores while remaining alert for potential new sites.”