Tax Hike Will Break the High Street’: Currys CEO Warns of Price Surge and Investment Freeze

Retail Giants Sound Alarm Over Potential Tax Hikes

As the UK government prepares its autumn budget, Currys CEO Alex Baldock has issued a strong warning: raising taxes on retailers would jeopardize both consumer affordability and the economic recovery. Echoing sentiments shared earlier this week by Sainsbury’s chief executive Simon Roberts, Baldock emphasized that further tax burdens would dampen investment, constrain hiring, and trigger inflationary pressures.

“We urge government not to make a further contribution to the tax burden as that would further dampen investment and increase prices in an inflationary way,” Baldock said.

“I would urge government to think very carefully before making the situation worse.”

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 The Warning from the Top: Why Retail Can’t Absorb More

National Insurance and Wage Pressures Already Biting

According to Baldock, the retail sector is already struggling with the dual pressure of increased employer National Insurance contributions and the recent rise in the National Living Wage, which came into effect in April. These cost pressures have forced Currys and other retailers to slow down hiring efforts despite signs of improving consumer confidence.

“The tax and wage increases are real. They are already making us pause before creating new jobs,” Baldock noted.

This slowdown in recruitment, he says, risks undermining a fragile recovery in consumer demand.

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Despite Challenges, Currys Posts Strong Performance

37% Profit Surge: A Silver Lining

In a surprising twist, Currys reported a robust financial performance for the year ending 3 May:

• Pre-tax profits jumped 37% to £162 million

• Group sales rose 3% to £8.7 billion

• UK like-for-like sales increased 6%, buoyed by service offerings such as:

  • Repairs

  • Financing

  • Mobile subscriptions

Additionally, the company resumed dividend payments to shareholders for the first time in two years—a move signaling confidence in its long-term stability.

“Yes, we’re delivering strong numbers—but that doesn’t mean the pressure isn’t there,” said Baldock. “We’re skating on thin ice, and any added tax could crack it.”

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AI Gadgets & Pandemic Afterglow: What’s Driving Sales

Tech Replacements Fuel Market Momentum

Currys benefited from a spike in sales of laptops and mobile phones, particularly AI-enabled devices. This surge is partly attributed to consumers replacing older electronics purchased during the COVID-19 remote work boom of 2020.

“We’re seeing a refresh cycle now, as many consumers upgrade gear bought five years ago during lockdown,” Baldock explained.

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Baldock Calls for Urgent Reform on Import Tax Loopholes

Online ‘Dumping’ of Cheap Electronics Poses Market Threat

Baldock also raised alarms over “dumping” of cheap electronics via online marketplaces, a growing issue tied to loopholes in the import tax system. While Currys specializes in higher-end goods and is less affected directly, Baldock stressed the long-term risk to UK retail competitiveness.

He specifically urged the government to reform the “de minimis” import threshold, which allows overseas retailers to avoid duties and VAT on low-value items:

• No import VAT on items £39 or below

• No import duty on items under £135

“We welcome the government’s promise to look at this, but the review must happen with urgency,” Baldock said. “Level the playing field now—or risk losing more UK retail jobs.”

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Retail Taxation in Focus: What’s at Stake in Rachel Reeves’ Autumn Budget?

Starmer and Reeves Under Pressure to Balance Growth with Fiscal Discipline

New Chancellor Rachel Reeves is expected to explore new sources of revenue in the upcoming autumn budget, with the aim of:

• Funding critical public services

• Spurring economic growth

• Staying within strict fiscal rules

Following a market scare on Wednesday related to speculation over Reeves’ future, Labour leader Keir Starmer reaffirmed his backing for the chancellor on Thursday.

But retailers are increasingly nervous that their sector may become a soft target for taxation.

“We’re not asking for handouts,” said Baldock. “We’re asking not to be punished for doing well in a tough environment.”

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The Bigger Picture: Retail as an Economic Engine

Retail remains one of the UK’s largest private sector employers, and any further taxation risks slowing job creation, stalling investment, and raising consumer prices—all of which could hamper the broader economic recovery.

Baldock’s message to Westminster is crystal clear:
”Don’t fix the roof by tearing off the walls.”

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Key Takeaways

• Currys CEO Alex Baldock warns government against raising taxes on retailers

• Says current pressures from NI hikes and living wage increases already hurting hiring

• Currys reports strong FY performance: £162M profit, 3% sales growth, resumed dividend

• Advocates urgent reform of import loopholes hurting UK-based retailers

• Emphasizes retail’s role in job creation and economic recovery