Co-op chief executive Shirine Khoury-Haq today (3 April) said the convenience retailer is facing an additional £80m in costs following changes to National Insurance contributions and the introduction of extended producer responsibility (EPR) rules.

Khoury-Haq said: “As we move through 2025 we expect to continue to see headwinds strengthen in the form of wider external pressures and volatility with broader geopolitical issues and increased cost inflation.

“We’re already seeing coming through National Insurance and extended producer responsibility charges, which represent an additional £50m and £30m pounds respectively, that our business will need to cover.”

Changes introduced by Chancellor Rachel Reeves in her 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.

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Meanwhile the EPR scheme seeks to move the cost of household recycling from councils onto the companies that create packaging. It is due to be implemented this October.

Speaking of the initial announcement made by Chancellor Rachel Reeves in October, Khoury-Haq said that Co-op “could understand that the government has a really tough job to do”.

“When we saw the National Insurance increase, what we said was, as long as that was balanced by business rates going the right way for small stores and for high streets, and as long as the government invested in policing, those two things would balance each other out.

“However, when you now start to add on the extended producer responsibility, which is a £30m cost for us, when you look at some of the other recycling schemes that may come into effect, when you understand that they are inconsistent between England and Scotland and Wales, and the cost and operational pressure that starts to put on the retail sector, it starts to really add up.

“My request of government has always been you must look at the layering of costs on industries, and especially our industry, so that we don’t tip over the balance, and then we don’t start impacting our high streets in our communities.”

Following the Spring Statement last week, the British Retail Consortium (BRC) urged the government to provide clarity around the implementation of upcoming policy impacting the sector as it grapples with £7bn in new costs following the Autumn Budget.