By James Davey
LONDON (Reuters) – Major British retailer Frasers felt it had been “kicked in the face” by the new Labour government’s budget, the sportswear and fashion group’s finance chief said on Thursday.
A raft of businesses have complained that the government’s move to hike social security contributions and the minimum wage will lead to higher costs, lower investment and ultimately weaker economic growth.
“Like much of retail we felt we’d been kicked in the face,” Chris Wootton, Frasers’ chief financial officer, told Reuters after the group cut its profit outlook, blaming weaker consumer confidence both ahead of and after the Oct. 30 budget.
“The skulduggery around the budget was quite mind-blowing,” he said in an interview.
“The retail sector has been on its knees for a number of years and what it didn’t need was this budget,” said Wootton, calling it a “two-handed tax grab”.
The government has said the budget measures were needed to fill a 22 billion pound ($28 billion) “black hole” it inherited from the previous Conservative administration.
Survey data published Nov. 22 showed UK consumers had turned a bit less pessimistic.
However, Wootton said it was hard to say when consumer confidence would significantly improve.
“We have to deal with the here and now. We still think people have got money in their pockets, we’re still a largely fully employed country. I just think confidence has been knocked.”
Frasers expects to incur at least 50 million pounds of incremental costs going into its 2025/26 year as a result of the budget.
“We have got our thinking caps on about how we mitigate it,” added the finance chief.
Shares in Frasers were down 13% in morning trading Thursday.
($1 = 0.7865 pounds)
(Reporting by James Davey; Editing by Catarina Demony, Kirsten Donovan)
