M&S and Sainsbury's shoppers warned over change to stores after Budget

Marks & Spencer and Sainsbury's are expected to face a combined £200m hit to their tax bills after Rachel Reeves Budget. Marks & Spencer are set to unveil their half-year earnings on Wednesday, and J Sainsbury will release their interim results the following day.

The two retailers could be forced to increase their prices after the Labour Party Chancellor unveiled sweeping changes to employers' national insurance. Sky News understands that Marks & Spencer (M&S), which will unveil half-year earnings on Wednesday, and J Sainsbury, which reports interim results the following day, are collectively facing an additional bill of close to £200m as a result of changes to employers' national insurance contributions (NICs) announced by Rachel Reeves, the chancellor.

Industry sources said the pressure on pricing would be "intense" given the thin margins on which the big supermarkets already operate. "Food price increases from next April are inevitable," said one source to Sky News today.

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The warning comes a day after Ms Reeves told Sky News that "businesses will now have to make a choice, whether they will absorb that through efficiency and productivity gains, whether it will be through lower profits or perhaps through lower wage growth".

Prior to the budget, Stuart Machin, the M&S chief executive, urged the chancellor not to increase taxes on it, calling them "a short-term, easy fix". "When I hear about plans to increase national insurance, a tax with no link to profit which hits bigger employers like us and our smaller suppliers, I'm concerned.

"The chancellor was right in the past to call national insurance a tax on workers." Jonathan Reynolds, the business secretary, will hold talks with British business leaders later on Monday about the impact of the budget from Chancellor Rachel Reeves last week.

Ms Reeves delivered her Autumn Statement on Wednesday.