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Marx and the Boss wig said chancellor Rachel Reeves’s ex-Budget The speech raised consumer concerns over the tax rise and warned that shoppers were now “planning for the worst”.
Chief executive Stuart Machin said the retailer’s customers are “concerned about rising costs and taxes” and what may happen in the upcoming budget.
He said the Chancellor’s unusual move to deliver a pre-Budget speech on Tuesday did not help ease fears or give certainty to businesses and consumers.
Ms Reeves warned the UK is bracing for a potential income tax rise in the November 26 budget, saying everyone “must contribute” to helping rebuild the economy and repair the country’s finances.
Mr Machin said: “The presentation may have calmed the bond markets but it hasn’t really calmed our clients.
“They may be planning for a good Christmas, but they may be planning for the worst for the budget.”
He said the group was “hoping for some news” so they could start planning, but added that “we’re all sitting here waiting for the 26th”.
“Why don’t they release the budget now? That’s what’s on people’s minds,” he said.
“That’s what’s going through our minds about running a business.”
According to Mr Mackin, for M&S, the most frightening outcome of the Budget would be tax increases that would “hit our customers’ wallets or the everyday economy”.
“That would not be good and in my view would not be a growth strategy.”
His comments came as the boss of JD WetherspoonSir tim martinAlso expressed concern over the upcoming budget on Wednesday, saying that the group is more cautious in view of the budget.
The retail sector has already been hit by the April increase in National Insurance contributions announced in last year’s Budget, as well as new packaging taxes.
M&S revealed that in total, these taxes caused M&S to lose £50 million in the first half.
Mr Machin said that while Ms Reeves had a “tough” job to get the public finances back on track, “you can’t blame the past and we have to move forward”.
“We would like the Chancellor to commit to growth, not more taxes,” he said.
His comments came as M&S revealed interim profits had more than halved after being hit by a major cyber attack earlier this year.
It reported underlying pre-tax profit falling 55.4% to £184.1 million in the six months to September 27.
As reported, profits almost evaporated, falling to £3.4 million from £391.9 million a year earlier.
M&S said it lost £324 million in sales because of the hack – slightly more than its earlier estimate of £300 million – but it was able to recover £100 million in its first half through insurance payouts.
In terms of impact on its bottom line, the attack is expected to have an impact of approximately £136 million on profits, with an impact of £101.6 million in the first half and an impact of approximately £34 million in the last six months of its financial year.
The group said sales at its fashion arm fell 16.4% due to the cyberattack, with sales at its online operations down 42.9% and in stores down 3.4%.
The high street giant halted all online sales for almost six weeks after the business was targeted by hackers around the Easter weekend and suffered empty shelves due to disruption to its logistics systems.
Customers’ personal data – which may include names, email addresses, postal addresses and dates of birth – was also taken by the hackers.
Mr Machin said the group was “back on track” and he expected profits in the second half to be “at least in line with last year” as he raised his cost-cutting target to £600 million.