John Lewis Partnership Chair Jason Tarry and Marks & Spencer Chief Executive Stuart Machin have increased pressure on the Government to avoid further tax rises in the 28 October Budget. Both are calling for a more supportive environment for the UK's largest retailers.
Tarry has focused on business rates, warning that raising property taxes for major retailers would affect high-street stores while Machin has gone broader. He attacked the last two Budgets and set out the taxes and regulations he wants reversed.
Shops carry the rates burden
Writing in The Telegraph, Tarry said the Partnership pays around £170 million a year in business rates. He described this as the Partnership’s biggest tax outlay and, after wages, its second-largest expense.
The higher charge under recent changes to the system applies to more than 200 John Lewis and Waitrose stores but only 18 distribution centres. As a result, shops bear around 80% of the Partnership's extra costs.
Tarry said a so-called "warehouse tax" would "reveal a fundamental misunderstanding of how modern high streets work":
"Major department stores and supermarkets, including our 36 John Lewis stores and hundreds of Waitrose branches, act as vital anchor tenants. They generate the primary footfall that sustains surrounding independent shops, pubs, bakeries and cafes. Penalising anchor retailers through higher business rates risks harming the smaller businesses operating in their orbit."
He urged the Government to make sure future business rates changes do not leave any high-street shop facing higher taxes. The Partnership plans to invest £50 million in John Lewis stores this year as part of its £800 million retail estate transformation plan.
Machin: 'unravel the mistakes'
Machin was more direct. Writing in the Daily Mail, he said: "I've never hidden what I thought of the last two Budgets. They were a disaster. Britain needed a plan for growth and got a pile of new taxes and regulations instead. I know money is tight.
"I'm not asking the Chancellor to rip up his fiscal rules, but at the very least, he should start unravelling the mistakes of the last two Budgets."
He said M&S faces £150 million in additional annual costs from recent changes, on top of a tax bill of around half a billion pounds. His demands include:
- ensure the Employment Rights Act does not treat normal weekend shifts as "low hours" contracts and so "ban the Saturday job".
- reverse the cut to the threshold at which employers start paying National Insurance, which he called the most damaging part of the increase.
- reform business rates.
- scrap Extended Producer Responsibility, which he described as a packaging tax and which cost M&S an extra £40 million in April.
On rates, Machin said: "It's right to support the pubs, bars and music venues on high streets that bring our towns to life. But if you do that by taxing supermarkets, you're paying for a cheaper pint by loading costs on to the weekly shop."
He added: "At M&S, we're investing over £2 billion in the next three years across our stores, supply chain and technology. But every pound that goes on new taxes is a pound we can't invest."
Wider pressure
Retailers have been resisting higher charges on large properties since proposals emerged to help fund expanded rates relief for smaller high-street businesses and pubs and similar venues. In September, the Retail Jobs Alliance, whose members include M&S, Tesco, Sainsbury's, Primark, Morrisons and Kingfisher, called for bricks-and-mortar retailers to be exempt from the highest-rate category, whose multiplier is currently 50.8p.
British Retail Consortium-commissioned analysis found that retail faced an effective tax rate of 71.5% in 2025/26, the highest of the 11 sectors examined.
Sky News has reported that the Chancellor has ruled out further taxes on warehouses, and is due to meet executives from retailers including Sainsbury's, M&S and Tesco on Tuesday.
