Sainsbury’s boss Justin King has issued a clarion call to the Chancellor ahead of today’s Budget for a National Insurance holiday for new jobs to get consumers spending again.
King said that in continuing tough trading conditions for the high street it was vital that the Budget contained “no shocks for consumers”.
He said: “The government should encourage companies to take on more employees. We would encourage a National Insurance holiday on new jobs for the first six or 12 months to encourage companies to invest for growth.”
The Sainsbury’s chief executive said today’s Budget was an opportunity for George Osborne to get people off benefits and into work, and retailers would benefit.
“People in work spend more than people who are unemployed,” King said. It came as Sainsbury’s unveiled a strong 3.6 per cent jump in like-for-like sales (excluding fuel) in the ten weeks to 16 March, giving a 1.8 per cent annual rise.
This comfortably beat City estimates, although analysts said there were concerns the group could be hit by a recovery at bigger rival Tesco.
The latter has spent £1bn on its stores since a profits warning over a year ago. Sainsbury’s said its convenience store business was growing at over 18 per cent year-on-year, with online grocery sales up nearly 20 per cent.
King said the horsemeat scandal had “clearly shaken” public trust, but that his group, Britain’s third biggest food retailer, had routinely carried out DNA testing on its products for more than ten years.
He said all the company’s chicken has been 100 per cent British since 2003, and all its fresh beef was sourced from the UK and Ireland. “We have seen a move towards steaks rather than mince, [raw] chicken breasts rather than boxed chicken,” King added.
Sainsbury’s shares closed. The stock has risen 20.5 per cent over the past year, but analysts say it still suffers from the “overhang” of the Qatar Investment Authority’s 26 per cent holding.
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