Asda chairman Lord Stuart Rose has said that tax changes announced within the Budget, which will cost the retailer around £100m, was “not an easy swallow”.

Rose told Grocery Gazette: “Is it inflationary? Possibly. Is it going to put pressure on the business? Yes. Are we as an industry, not just Asda, very efficient? Yes, we always find ways of making things work, because we want to make sure that we give our customers the best possible offer. But it’s tough, the industry has been hit hard.”

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 a week.

Just yesterday (7 November), Sainsbury’s CEO Simon Roberts warned that the £140m extra piled onto its bill will lead to “some difficult decisions” as there “just isn’t the capacity to absorb all of this”.

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It comes amid a slump in sales for Asda, as for the quarter ending 30 September, the supermarket giant’s sales, excluding fuel, fell 2.5% to £5.3bn, with like-for-like sales declining 4.8%.

Rose said: “We’ve been going through a hell of a lot of transformation. We’ve doubled the size of our store footprint over the last couple of years, we’ve added a convenience business, we put Asda Rewards out.

“We’ve made significant progress on the transformation programme, weaning ourselves off the Asda platform. But it has meant, frankly, that we probably have been a bit distracted from looking after the day job, which is our customers.

“So we’ve addressed this as a top priority, making sure that stores are better facing in terms of their customers, making sure availability is top of our project, making sure that our pricing strategy is correct and we think we’re doing the right things, and customers are beginning to respond to the fact that we are investing in our stores.”

The grocer unveiled plans today (8 November) to invest an additional £13m in store hours over the golden quarter to ensure more colleagues are on hand to support customers during the busy festive period.

The changes also come as Asda continues it search for a CEO after co-owner Mohsin Issa stepped back from his executive leadership role today in September, with chair Rose taking on executive responsibilities alongside TDR Capital partner Rob Hattrell, at least until it finally hires a permanent chief executive.

“The core team of the senior management team is a pretty stable team,” Rose said, adding that while there was “no immediate news” on the search for a CEO. “It’s an active process and it’s a work in progress.”