Stuart Machin, M&S Chief Executive, has called on the Chancellor Rachel Reeves to “back business, not burden it” in her Autumn Budget. In a statement published on the M&S corporate website, he warns the Treasury against “plugging fiscal holes with tax rises, stoking inflation and suppressing demand”, instead recommending it “spend less, borrow less, tax less, regulate less, reduce inflation and enable growth.”
For retailers, the Autumn Budget – which takes place later than usual this year on 26 November – is causing a headache. Tax rises are widely anticipated despite Labour’s manifesto promise not to increase income tax, VAT and employee National Insurance, which has caused a drop in consumer confidence ahead of the usually lucrative ‘Golden Quarter’. Retail sales growth slowed to 2.3% in September, down from 3.1% in August, as shoppers cut discretionary spending, according to figures from the British Retail Consortium, and nearly half (44%) of consumers surveyed by Barclays in its latest Consumer Report said they were changing spending habits in anticipation of the Budget.
NIC increase “catastrophic”
In his statement, Machin says “anyone suggesting the Chancellor rip up her fiscal rules is mad” – a reminder of that Labour manifesto promise not to raise taxes – and draws attention to the £7 billion in additional costs that he says have been heaped on the retail sector by taxes and regulations. These include the extended producer responsibility (EPR) and drinks deposit scheme (DRS), as well as the higher National Insurance Contributions, which he describes as “catastrophic” and blames for the loss of almost 100,000 jobs across the economy. “Our tax bill at M&S has risen to roughly £650 million,” he adds.
He calls for action on business rates, swifter delivery of the EU agrifood deal, support for farmers through a rethink of inheritance tax and homegrown food targets, and helping more young people into work by offering national insurance ‘holidays’ for businesses. “Retail has a big role to play in the Government’s plan,” he writes. “We’re the engine of the everyday economy – creating jobs, driving high street footfall, and making sure families get affordable and high-quality food, clothes and other essential goods.”
M&S performs strongly – but cyberattack will have impact
The most recent financial results for M&S show that the FTSE 100 listed company delivered its strongest performance in over 15 years for the year ending 29 March 2025, with revenue up 6.1% to £13.91 billion and adjusted pre-tax profit rising 22.2% to £875.5 million. Food sales led the charge, climbing 8.7% to £9 billion, while Clothing & Home grew 3.5% to £4.2 billion. Like-for-like sales increased by 8.6%, and the company raised its dividend by 20% to 3.6p. However, statutory profit fell 23.9% to £511.8 million due to a £248.5 million impairment linked to Ocado Retail, highlighting ongoing challenges in its joint venture.
The results underline M&S’s successful turnaround strategy, driven by strong food performance, improved fashion ranges, and cost efficiencies. However, the interim results for H1 2025/26, scheduled for 5 November, will show the impact of the cyberattack earlier this year that led to ongoing operational problems and wiped an estimated £300 million off the company’s operating profit.
For the upcoming Christmas trading period, the key question will be whether M&S can sustain momentum in food while continuing to modernise its Clothing & Home offer. With consumer confidence fragile, its ability to leverage brand strength and omnichannel investments will be crucial to maintaining growth and defending market share. What happens in the Autumn Budget will be as critical to the future of M&S as any other retailer – and M&S boss Stuart Machin’s call on the Chancellor to back business echoes the views of many across the retail sector.
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