Tesco is trialling earlier closing times at some of its Express stores, following a sharp £235 million rise in staffing costs linked to Chancellor Rachel Reeves’s Budget measures.
Britain’s biggest supermarket chain is closing selected stores at 10pm instead of 11pm and reducing staffing levels at certain locations. The changes are part of a pilot scheme focused on the retailer’s less profitable branches—referred to internally as “Express Lite” stores.
Express Stores Face Cuts Amid Budget Pressures
The move follows Tesco chief executive Ken Murphy’s warning that the company is urgently working to absorb significant additional costs imposed in the spring Budget.
In April, Tesco revealed a £235m rise in National Insurance contributions, a direct result of Reeves’s tax changes. The employer contribution rate jumped from 13.8% to 15%, and the threshold dropped from £9,100 to £5,000.
Combined with a 6.7% rise in the National Living Wage, UK retailers are facing a total £7bn surge in labour costs, according to the British Retail Consortium.
£500m in Cuts Planned to Protect Profitability
In response, Tesco announced plans to cut £500m in operational costs this financial year. Murphy warned that these cost-saving efforts were essential to preserve Tesco’s value proposition for shoppers.
“All we’re saying as an industry is, don’t make it too hard for us to keep delivering great value,” he told reporters in April.
Tesco also plans to invest £400m in price cuts this year, a move that could cause profits to fall by up to 14%.
Unions Raise Red Flags Over ‘Express Lite’ Staffing
The Usdaw union has expressed concern over the Express Lite trial. National officer Daniel Adams said the union had not approved the changes and was monitoring their impact closely.
“We retain significant concerns around how this trial will work,” Adams said. “We’ve raised issues about low staffing, and while Tesco has said there will be no redundancies, we’re aware staff may need to transfer stores—which can affect travel, childcare, and shift patterns.”
Tesco said it is working with affected employees and is considering individual needs when arranging transfers.
Tesco: No Impact on Customers or Product Range
A Tesco spokesperson said the trial involves a small number of stores and will not affect customer experience.
“These changes aren’t visible to our customers, who will continue to receive the same great service they expect, and there are no changes to the range of products we sell,” the spokesperson added.
Industry-Wide Response to Labour Cost Surge
Tesco is not alone in adapting to increased costs. In April, The Telegraph reported that pubs across the UK were shutting earlier, some calling last orders at 9pm instead of 11pm to curb staffing expenses.
Meanwhile, rival supermarket Asda has intensified a price war, slashing prices on key items while moderating increases on others. Chairman Allan Leighton said Asda had opened a price gap over Tesco and would continue to use aggressive pricing strategies to win over cost-conscious shoppers.