High-street stalwarts face cost squeeze and tell Labour: do no more harm

# What's happening

# Why this matters Retail is labour- and energy-intensive. The combination of higher employment bills, energy prices and business rates increases costs across the sector. Retailers with large physical footprints and anchor stores are particularly exposed. The message these firms are sending to Labour ministers — including mayor Andy Burnham and Chancellor John Healey — is to avoid introducing further burdens that would worsen margins, cut investment and threaten jobs.

# How each retailer is responding

• Partnership ownership gives longer-term financial latitude so the group can tolerate near-term losses.
• The group reported higher spending on tired stores and is emphasising Waitrose's turnaround, branded as the 'Home of Food Lovers', and investment in flagship outlets such as Oxford Street.

• It has added click-and-collect and acquired warehouse capacity to introduce full online delivery in Great Britain, aiming for low-cost logistics to maintain its value proposition.
• Primark is also addressing underperformance across the Continent and in some US regional markets while leveraging localised successes such as its Manhattan store.
• ABF faces volatility elsewhere in the group, notably substantial losses at its sugar division, which will weigh on overall results through 2026-27.

# Macro backdrop that complicates retail recovery

• UK market yields are elevated — 10- and 30-year gilts are around 5.37 percent and 5.93 percent — raising borrowing costs for business and consumers.
• Wholesale gas prices have surged, up about 128 percent year-on-year for the referenced week, which feeds into energy bills and consumer prices.
• Consumer price inflation for September is expected to be higher, driven by energy, food and other winter-related costs, creating a tougher consumer-spending environment.

# Immediate implications for consumers, jobs and investment Retailers expect pressure on sales this winter as households face higher bills and the threat of interest-rate rises. Companies that can't absorb cost increases risk cutting jobs, delaying store investment or passing prices to consumers. The retail sector is pressing the new Chancellor to revisit tax and business-rate decisions that they argue would compound these risks.

# Other notable items A separate development in private infrastructure: The Boring Company raised a reported $3 billion in funding to build tunnel projects, including in Dubai and Las Vegas. While not a retail story, the piece flags how capital is flowing to large-scale transport and infrastructure ventures.

John Lewis and Primark are adapting through store investment, operational change and digital steps, but both want policy stability. With inflationary pressures, energy-price volatility and higher market yields, further policy-driven cost increases would increase the likelihood of job cuts and weaker retail investment over the next 12–18 months.