| 12 months to 31st March (£m increase) | 2005 | 2006 | ||
|---|---|---|---|---|
| Inflation | 40 | 50 | ||
| Volume | 20 | 10 | ||
| Productivity / GiS | (90) | (70) | ||
| (30) | (10) | |||
| Pension | 15 | 15 | ||
| Existing stores/trading | 45 | 40 | ||
| IT Infrastructure/tills | 35 | 25 | ||
| New space/formats | 35 | 30 | ||
| YoY cost increase | 100 | +7% | 100 | +6% |
Let me remind you that we expect operating cost growth in the current year to be around 6% with the constituent parts set out in the table.
We are seeking sufficient productivity gains to again offset underlying cost growth.
The charge for pensions will again rise by around £15 million as a result of the move to FRS17 under UK GAAP and IAS19 under IFRS.
The ongoing recurring costs of the 04/05 investments together with a smaller number of new initiatives in the current year will add a further £95 million.
We have reviewed spending plans in the light of the current trading environment and have scaled these back to a smaller group of projects which we are confident offer the best benefit for the medium term development of the business.
