HMV suspends plans for new shops as Budget hikes costs
HMV has suspended plans to open more new stores next year, blaming the decision on the government’s tax-raising Budget.
The company planned to open multiple shops in the UK in 2025, but HMV’s owner Doug Putman told The Telegraph yesterday that this proposal was now on hold following the Budget.
Confirming the decision, Putman told City PM today: “We’d love to continue to open stores and have done so this week with new locations in Kingston and Cheltenham as well as opening the HMV Bookshop at our flagship store. However, the cost to open new shops, and the risk associated with doing so, has undoubtedly increased since the Budget was announced.
“We normally aim to open 5-10 stores each year, though plans for further expansion in 2025 are on hold at the minute as we weigh up the impact of the government’s latest measures.
“When we look at next year, we’ve got everything on pause, so we could end up opening five stores. But I think more than likely we’re not. I think we’re probably getting close to zero.”
Earlier this week, UK retail bosses wrote to the Chancellor to warn about the wide-ranging damage that will be caused by the Autumn Budget, adding that job losses were “inevitable”.
In last month’s Budget, Chancellor Rachel Reeves increased employers’ national insurance contributions by 1.2 per cent, and lowered the wage threshold at which employers must start paying the tax from £9,100 to £5,000.
It also decided to hike the minimum wage for over 21s, known officially as the National Living Wage, by 6.7 per cent.
The head of the British Retail Consortium, Helen Dickinson, who was previously upbeat about the prospect of a Labour government, told City PM this week that support for the government from the retail sector was on a knife edge, urging it to rethink decisions that will dramatically hike retailers’ costs.