‘I wouldn’t trust govt to do my shopping’, fumes boss of retailer AO World who says tax raid will lead to more inflation
THE boss of AO World says Labour’s £25billion tax raid has broken business’s trust in the Government for good.
Chancellor Rachel Reeves tried to rebuild confidence with the CBI on Monday by promising she would not “be coming back with more borrowing or more taxes”.
John Roberts, chief executive of the online electricals retailer, yesterday told The Sun: “Trust them? I would be worried about trusting them to go out for half-a-dozen eggs.
“They weren’t talking of raising taxes when they were trying to get elected — and then suddenly everything changed.”
The Chancellor has repeatedly argued that her painful Budget was required to repair what she claims is a £22billion black hole in the public finances left by the Tories.
But firms have warned that her hike in costs for business is anti-growth and will lead to higher prices, job cuts, store closures and investment plans being curbed.
AO World said it would face a £8million total hit from the Budget’s changes to employers’ National Insurance contributions.
Mr Roberts stressed the extra staffing costs would inevitably lead to inflation “like night follows day”.
He said it would mean that all companies would be looking to increase automation to reduce their labour costs.
Mr Roberts, who started his company in 2000 after a £1 bet in the pub, said that while businesses were now forced to work with the extra costs they had been burdened with, he reckoned the Government’s spending review would result in wasted funds.
“Whichever toilet they flush it down we will just end up with more debt for future generations to pay.
“The handouts they gave the train drivers didn’t result in improvements, efficiencies or anything at all. Just a lot more debt.
“The NHS is financial blotting paper and we just keep spending on it.”
When asked whether he would consider taking a waste-tackling government job, similar to Elon Musk’s new government efficiency department in the US, Mr Roberts said he reckoned he’d be qualified.
But he added: “It’s hard enough flogging washing machines.”
Despite the headwinds, AO World yesterday inched up its profit forecasts for the ninth time in a row after slashing costs to make “every sale profitable” and winning back customers.
AO’s sales grew by 6 per cent to £512million in the six months to the end of September.
And pre-tax profits rose 22 per cent to £16.2million.
Halfords: Car costs to soar
HALFORDS has warned the price of car repairs and replacement tyres will jump even higher because of the blow from the Budget.
The bike retailer and garages firm yesterday said it faces a £31million hit due to the extra staffing costs from the Chancellor’s tax raid on business.
It said it was only able to mitigate £9million of the extra costs expected next year.
As a result it warned it would have to “pass through” higher wage costs to consumers, who now face paying more for car services and repairs at the company’s Autocentre garages.
Official figures show the average cost of a car service at a local garage has already jumped from £202 to £220 in the past year.
Halfords boss Graham Stapleton urged the Government to overhaul the apprenticeship levy to help businesses which want to carry on employing and training younger workers.
Halfords yesterday reported profits had slumped by almost a quarter to £17.8million in the six months to September 27.
Its overall sales shrank by 0.1 per cent.
Tumbling bicycle sales weighed down the higher-value sales made by its Autocentres arm.
Five-year warning for Asda
ASDA’S boomerang boss Allan Leighton has told staff the store’s turnaround hinges on not “disappointing our customers on availability”.
Over the weekend, Asda announced the exit of Lord Stuart Rose, 75, as executive chairman and his immediate replacement as Mr Leighton.
The retail veteran, 71, most recently chairman of the Co-op and Royal Mail, built his reputation on turning around Asda in the 1990s.
He spent his first day giving a tough message to staff at its HQ in Leeds amid sliding sales, crumbling market share and tough competition from cheaper rivals Aldi and Lidl.
He said a turnaround rested on getting “back to our Asda DNA, our Asda Price position. That’s what sets us apart.”
Calling for the grocer to be “ruthless”, he said the turnaround could take up to five years but added: “I wouldn’t have come back if I didn’t think it was possible.”
Frasers' £3m deal
MIKE Ashley’s Frasers Group has bought into another retailer, taking a £3million stake in Marks Electrical.
White goods business Marks was worth £115million when it floated in 2021 but is now valued at just £55.4million.
It comes after Frasers Group cut its stake in Currys but retained a 24 per cent holding in rival retailer AO World.
A Marks Electrical spokesman said Frasers’ investment “represents a vote of confidence in our business”.
Ofwat in denial
OFWAT’S head has denied it failed to properly police water companies — despite admitting their records on sewage spills “must change” and they should not have been allowed to rack up huge debts.
David Black told MPs firms must make “changes across the board” but he “wouldn’t agree” the watchdog fell short.
His comments come despite Thames Water coming close to running out of cash.
Mr Black also suggested public anger over water businesses is making it harder to attract investment.
Bonds less generous
THE prize fund rate for Premium Bonds will become less generous from the January 2025 draw, NS&I has announced.
The number of £100,000 and £50,000 prizes will be reduced but there will be a higher number of £25 prizes.
Crypto gamble
BRITISH crypto investors should “be prepared to lose all their money” as there are no protections, the finance watchdog yesterday said.
The Financial Conduct Authority wants to fully regulate crypto assets by 2026.
Individuals are protected for up to £85,000 in traditional forms of investment.
Around seven million UK adults already own crypto assets, according to the FCA.
The average holding is £1,842 but growing awareness is encouraging more people to put cash into digital currency.