Stuart Machin, the chief executive of Marks & Spencer, has labelled a government proposal for voluntary price caps on essential food items as 'completely preposterous', arguing that ministers should instead reduce tax and regulatory burdens on supermarkets.
Machin said M&S already loses money on some basic items such as milk, bread and baked beans, and makes very slim profits on other products like eggs and sugar. 'I don't think government should be trying to run business,' he said. 'They should try to understand business better.'
The comments come after it emerged that government officials had raised the idea with supermarkets of stocking at least one version of basic items at a set low price in exchange for easing regulations on packaging and healthy food. However, Chancellor Rachel Reeves is now not expected to mention the voluntary cap in a speech on Thursday.
Machin highlighted a 'triple whammy of headwinds' facing retailers, including increased taxation, greater regulatory burden and ongoing global conflict. He cited £40m in additional costs from a new packaging levy, £50m from national insurance changes, and extra costs due to the Middle East conflict.
The chief executive spoke as M&S pledged to invest in technology and 18 new food stores, after annual results revealed underlying profits slumped by 23.8% to £671m in the year to 28 March, partly due to a cyber-attack that cost £131.3m. Food sales rose 7%, but fashion and homewares sales fell.
M&S chair Archie Norman said the effect of the cyber incident was 'now tapering', while Machin described the coming year as 'one of the most important in our history' as the retailer invests for growth.
