Two of Britain’s biggest supermarkets are axing jobs in the wake of the Budget, writes Emily Hawkins.

Sainsbury’s announced plans to cut 3,000 staff and warned “tough choices” had to be made as it prepares to deal with a sharp increase in the cost of doing business.

And Morrisons said it would make 200 workers redundant.

The losses fuelled fears over Labour’s handling of the economy following Rachel Reeves’s tax-raising Budget in the UK.

They came as fresh figures showed consumer confidence has crashed to its lowest level since December 2023.

“Consumers are losing confidence in the UK’s economic prospects,” said Neil Bellamy, a director at GfK, a consumer intelligence company.

“People see dark days ahead.”

Sainsbury’s, the country’s second biggest grocer behind Tesco, will slash 20pc of senior management roles at its head office and close cafes and hot food counters.

“We are facing a particularly challenging cost environment which means we have had to make tough choices about where we can afford to invest and where we need to do things differently to make our business more efficient and effective,” said boss Simon Roberts.

Retailers sounded the alarm over soaring costs in October in the wake of the Budget.

Revolution Beauty yesterday warned its annual sales would plunge after consumers reined in their cosmetics spending over Christmas.

And Morrisons said it was cutting 201 jobs including in its recruitment and payroll teams.

It faces an extra £75m of costs due to the National Insurance Contributions (NICs) changes, causing boss Rami Baitieh to criticise the Government for adding “insult to injury”.

Firms, from independent shopkeepers to nationwide chains, face an increase in NICs in April alongside a barrage of other costs that have been imposed by the Chancellor.

This includes inflation-busting rises in the minimum wage and hikes to business rates paid on commercial properties.

The cuts at Sainsbury’s are part of a major overhaul to simplify operations as it woos shoppers back from discount rivals.

Last February, it said it would slash costs by £1bn over three years so that it can lower prices. Job losses in the head office will take place over the next few months.

Plans include closing its 61 cafes, which most customers do not use. And it will close its patisserie, hot food and pizza counters.

It will also introduce self-service bread-slicing machines in another sign that retailers could replace humans with robots in a bid to reduce costs.

The latest redundancies come on top of 1,500 job losses last year, mostly from a contact centre in Cheshire.

Conservative party business spokesman Andrew Griffith said: “This news from one of Britain’s biggest retailers is devastating but no surprise.

“Thanks to Labour’s Budget 3,000 jobs will be lost and 3,000 families will suffer without the security of regular pay.” Clive Black, retail analyst at Shore Capital, said the job cuts were “a move that is very much in line with our concern that the UK is facing a period of more elevated unemployment if the Government does not make better decisions and soon”.