Call for food price caps ‘completely preposterous’, says M&S boss

The boss of Marks & Spencer has called a government proposal for voluntary price caps on essential food items “completely preposterous”, saying it should reduce tax and regulatory burdens instead.

Stuart Machin, the chief executive of the clothing, homewares, food and beauty retailer, said M&S already lost money on some basic items such as milk, bread and baked beans and made very slim profits on other products such as eggs and sugar.

“I don’t think government should be trying to run business,” he said. “They should try to understand business better. There is so much in the government’s control. My advice is to try to reduce tax and regulatory burden and free us up in a very competitive market.”

It emerged on Tuesday that government officials had raised the idea with supermarkets that they should stock at least one version of basic items such as bread, milk and butter at a set low price in exchange for an easing of some regulations on issues such as packaging and healthy food.

Machin said retailers were facing “a triple whammy of headwinds with increased taxation, a greater regulatory burden and ongoing global conflict” and ministers “can do things to relieve some pressure and help retailers grow and invest”.

He said a “big headwind” was higher taxes, with £40m in additional costs from April’s new packaging levy and potentially a further £10m this year as well as £50m higher costs from national insurance changes or up to £100m if the higher costs from suppliers’ need to pay extra national insurance were included.

Machin said the additional cost from new regulations and additional taxes “does all link to employment”, putting a dampener on businesses’ ability to take on more people. He said most of the taxes had been known about, and so M&S had planned in ways to cut costs and offset the impact.

However, he said the unexpected Middle East conflict had already prompted some suppliers to ask for higher prices, adding “a few million” pounds to M&S costs. Machin said M&S was able to absorb or offset most of this.

The chief executive was speaking as M&S pledged to invest in technology and 18 new food stores after annual results revealed last year’s paralysing cyber-attack had knocked almost a quarter off its profits.

Machin said the year ahead would be “one of the most important … in our history” as it added automated distribution centres, refurbished clothing departments and used AI to sharpen marketing and product sourcing.