British fashion retailer New Look is poised to speed up its store closure programme whilst major food producer 2 Sisters pushes supermarkets to absorb substantial cost increases, as the ripple effects of Labour’s tax-raising budget continue to impact large employers across multiple sectors.
Industry sources reveal approximately 25% of New Look’s 364 UK stores face potential closure as leases expire, threatening significant redundancies within its 8,000-strong workforce. While some store closures were inevitable, the hastened pace of shutdowns directly stems from the considerable cost increases unveiled in October’s budget.
Starting April, employers will face a national insurance rate increase to 15% from 13.8%, coupled with a reduction in the payment threshold from £9,100 to £5,000. The minimum wage is set to climb 6.7% to £12.21 hourly, whilst the retail sector confronts a £140 million business rates increase.
These mounting pressures have prompted 2 Sisters Food Group, Britain’s largest chicken producer, to attempt passing the full budget impact onto supermarkets, raising concerns about renewed food inflation. Labour-intensive food industry operations will bear the brunt of rising employment costs, with analysts at CreditSights estimating the budget will add at least £30 million to 2 Sisters’ annual expenses.
New Look’s chief executive Helen Connolly oversees a dramatically reduced high street presence compared to 2018 when the retailer operated nearly 600 stores. Through two restructuring programmes, the chain now maintains 364 outlets, each operating under turnover-linked rental agreements.
The Centre for Retail Research projects 17,350 shop closures throughout 2025, marking a significant increase from approximately 13,500 closures in the previous year. This trend suggests other retailers may follow New Look’s strategy unless substantial rent reductions can be negotiated with property owners.
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