Sainsbury’s CEO Links Youth Jobs Push to Rising Retail Employment Costs

Sainsbury’s is putting 10,000 work experience opportunities for young people alongside a demand for lower employment costs. Chief executive Simon Roberts argues that efforts to address youth unemployment will be harder to sustain if retailers face further increases in the cost of hiring. The tension is clear: businesses are being asked to create entry points into work while managing taxes and other expenses that, Roberts says, can affect hiring and food prices.

The grocer has promised to create 10,000 work experience places for young people who are not in education, employment or training. The commitment sits within a wider effort by retail and hospitality businesses to offer thousands of work opportunities. Roberts wants public support for that effort, and says businesses should not be faced with further costs that make employment more expensive.

“It’s so important that we don’t see any repeat of what we’ve seen in previous budgets, particularly the impact on the tax on employing people through national insurance, or any other costs in the industry that are going to cause food inflation,” Roberts told reporters.

His argument connects two pressures that matter to retailers: the cost of bringing people onto payroll and the prices customers pay for food. A higher employment bill can put pressure on a company’s operating costs. How businesses respond may vary, but Roberts is warning that additional expenses could make it harder to expand hiring and could add to pressure on prices. The source provides no estimate of how much any future cost increase might affect Sainsbury’s or its customers.

Hiring costs shape the appeal for support

Roberts said employer national insurance increases implemented under Rachel Reeves had “brought a lot of impact to the retail sector”. Retail leaders have asked Chancellor John Healey to reverse some of those increases. Helen Dickinson, chief executive of the British Retail Consortium, said such a change could “turn the tide on unemployment”.

The employers’ case is that the cost of hiring affects how readily firms can offer work, including opportunities for people with limited experience. For Sainsbury’s, the 10,000 placements give that argument a concrete scale. But the source does not specify when the opportunities will be available, how they will be distributed, or how many participants might move into permanent employment. Those details will matter in judging the commitment’s eventual effect.

Roberts called for no further cost rises for what he described as “an industry that’s already heavily taxed”. “Our ask is to make sure that we don’t do anything to further aggravate that situation and [to] make sure that we’re working hard to bring down the cost of employment.” His remarks frame hiring costs as an issue for the wider sector, rather than as a Sainsbury’s initiative alone.

Last week, leaders from retailers including Sainsbury’s and Tesco met with Healey. They called for changes to business rates and more action to reduce the number of young people outside education, employment or training. Roberts said he was confident that Andy Burnham’s government was “listening to business”. The retailers’ requests bring together employment costs, the tax burden on stores and the challenge of giving more young people a route into work.

Food prices remain part of the calculation

The employment debate comes as Sainsbury’s faces a tougher trading picture. Its shares fell nearly four per cent on Thursday after the grocer reported slower sales growth and warned that shoppers were experiencing “tough” cost-of-living pressures. That market reaction followed news about trading and customer budgets; the source does not attribute it to Roberts’ comments on hiring.

Roberts also offered a less severe near-term view on food prices. He said price increases ahead of Christmas would be softer than feared. Industry figures had previously expected food inflation to reach as high as 10 per cent this year, while prices are now expected to peak at 6.4 per cent next summer. These are forecasts reported in the source, not a guarantee of where inflation will land.

“Over the first part of this year, inflation hasn’t really moved anything like some of the forecasts that were out there, which is obviously good news for customers,” Roberts said. Slower price growth would ease some pressure on household budgets, though food inflation could still rise to the stated peak next summer. For retailers, the combination of customer sensitivity to prices and higher operating expenses leaves limited room for costs to rise without consequences.

The next test is whether commitments to create work experience places translate into lasting access to jobs, while retailers continue to press for lower hiring costs. The number of placements is specified; their eventual employment outcomes are not. At the same time, the gap between earlier inflation expectations and the current forecast gives customers and businesses a reason to watch food prices closely as the year progresses.