Sainsbury’s chief executive Simon Roberts has warned that prices will rise following the government’s decision to hike National Insurance Contributions.

Roberts said its National Insurance would increase more than 50% year on year as £140m extra was piled on its bill, which will lead to “some difficult decisions” as there “just isn’t the capacity to absorb all of this”.

He said: “When you think about the £140m in our business, I don’t think you can shy away from the fact that, because of the changes on everyone’s cost base, it is going to feed through into higher inflation.

“This industry operates on very low margins, and there just isn’t the capacity in the structure of the way the supermarket industry works to absorb these level of costs without some impacts on inflation.

“We’ll do everything we can to mitigate that impact but there will be inflationary impacts, because our costs are going up.”

Changes brought in by Chancellor Rachel Reeves’ first Budget last month mean that from April 2025, employers’ National Insurance Contributions will rise from 13.8% to 15% on a worker’s earnings above £175.

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When the changes were announced last month, British Retail Consortium chief executive Helen Dickinson described the increases as “yet another case of piling taxes on an already overburdened industry – a decision which will reduce investment in shops and jobs”. 

Among the changes set out by Reeves is the permanent lowering of business rates for retail, hospitality and leisure properties from 2026/27.

Yesterday (6 November), M&S chief executive Stuart Machin admitted he was “disappointed” around the lack of clarity around business rate reform.

He said: “I was disappointed that it’s unclear what that will be and the impacts of that, and that’s been kicked into 2026.”