Unitas chief operation officer David Cooke has warned that businesses in the wholesale, retail and foodservice industries may have to revisit staffing levels and delay investment plans, following the rise of wage bills in this year’s budget.
“When the wage bill rises, the impact is immediate,” he explained. “Some may reduce headcount; others will pause recruitment. Investment plans may be delayed. None of this supports growth or long-term stability.”
Highlighting that the industry employs more than 5m people across the supply chain, Cooke said that most businesses operate on margins of only 1-3%, leaving very little room to absorb cost increases of any size, especially across large workforces.
“And when costs cannot be absorbed, they inevitably move through the supply chain. That means higher prices on retail shelves, depot shelves and cash & carry shelves. With households still under pressure, that is not something anyone wants to see.”
Read more: FWD welcomes supermarket business rates decision reversal in Budget
Rachel Reeves 2025 Budget saw a rise in the National Living Wage for workers aged 21 and over. From April it will increase to £12.71 an hour, up from £12.21, which is a 4.1 percent increase.
“I support fair pay. But I also recognise how disproportionate the impact can be on our sector when policy changes are made without targeted support. Wholesale and retail are already carrying a heavy load,” he said.
On a more positive note, Cooke added that the budget also delivered some welcome news on business rates which had the potential to add yet another layer of cost burden.
Under the 2025/26 settings announced by the Government, the “small business” multiplier is frozen at 49.9p in the pound, while the “standard” multiplier (for larger properties) is set at 55.5p. Retail, hospitality and leisure businesses were given 40 per cent relief on their business rates bill in a bill to boost the industries post-pandemic.
“That outcome is lower than many in the sector feared and so credit to FWD advocacy on behalf of wholesale, retail and foodservice companies. A small win in what remains a very challenging market.”
