HMV has put a halt on its expansion plans in the UK and will be opening stores in Ireland and Belgium instead. The decision comes after wage increases were announced in the autumn budget, starting next month. Phil Halliday, the managing director of the entertainment retailer, explained that they were struggling to maintain profits even with an increase in sales. Sales rose by 6.5% to £11.6m in the year ending on May 30, 2024, but pre-tax profits fell by more than 6% to £4.9m due to rising costs from higher wages.

Halliday said that the interest in exclusive releases from artists and the demand for classic albums is driving a 15% increase in vinyl sales and a 5% rise in CDs. He also added that HMV plans to open a store in Limerick, Ireland, in June and another in Antwerp, Belgium, this autumn. The online store will be made available to shoppers in Ireland and mainland Europe later this month. Although they hope to open up to 10 stores per year in Europe from the end of next year, they still aim to expand in the UK under improved conditions.

The chancellor, Rachel Reeves, announced in the October budget that the rate of national insurance contributions paid by employers will increase from 13.8% to 15% this April, which will increase the cost of employing workers. Halliday believes that the government should have introduced changes to business rates this year instead of 2026 to help offset the higher costs from employer’s national insurance and the minimum wage. He also mentioned that business rates feel unfair compared to other sectors.

Source: https://www.theguardian.com/business/2025/mar/06/hmv-puts-uk-expansion-on-hold-because-of-budget-tax-rises