Currys boss says price rises ‘inevitable’ due to Budget cost increases
Alex Baldock also warned that policies announced by the Chancellor in October will ‘depress investment and hiring’ plans.
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Your support makes all the difference.The boss of Currys has said price rises will be “inevitable” as it prepares to face £32 million in extra costs due to the autumn Budget.
Alex Baldock, group chief executive of the electronics chain, also warned that policies announced by the Chancellor in October will “depress investment and hiring” plans.
It is the latest retail business to indicate that some shoppers will see a knock-on effect from increases to business National Insurance contributions and an increase in the minimum wage.
Currys said it predicts £21 million in extra costs linked to National Insurance and the minimum wage, a further £9 million in costs passed through from partner businesses and an extra £2 million in business rates costs.
One highlight is rising demand for AI laptops, where we enjoy over 75% market share in the UK
Mr Baldock said the group still expects to grow profits this financial year “despite new and unwelcome headwinds from UK government policy”.
He added: “These will add cost quickly and materially, depress investment and hiring, boost automation and offshoring, and make some price rises inevitable.”
The electronics and white goods retailer revealed that group revenues increased by 1% to £3.92 billion for the half-year to October 26, compared with the same period a year earlier.
Currys, which runs 715 stores, said “strong” sales in the UK helped to offset a modest decline in its Nordics business.
UK like-for-like revenues increased by 5%, with total revenues climbing to £2.34 billion in the region.
The group also revealed that it reduced its pre-tax loss for the half-year to £10 million, from a £44 million pre-tax loss a year earlier.
It has said trading is in line with expectations in the run up to Christmas amid strong demand for AI-related products.
Mr Baldock said: “We were well prepared for our peak trading period, with healthy stock and market-beating, best-ever deals that show our unmatched importance to suppliers.
“We’re trading in line with expectations. One highlight is rising demand for AI laptops, where we enjoy over 75% market share in the UK.”
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Compared to recent history, Currys had an electric start to the year, with both first-half revenue and profit moving higher.
“The positive momentum and continued recovery indicate a potential easing market headwinds and there’s now cautious optimism for the future.”
Shares in the company were 12.8% higher in early trading.