Britain’s major supermarkets have issued a cautionary statement regarding food prices. They are urging the Chancellor to exempt stores from a proposed business rates surcharge, warning that customers will ultimately bear the brunt through increased prices.
In a joint letter organized by the British Retail Consortium (BRC) and directed to Rachel Reeves, the supermarkets argue that shielding retailers from extra tax burdens would help combat food inflation. The letter, signed by top executives from Tesco, Sainsbury’s, Aldi, Asda, Iceland, Lidl, Marks & Spencer, Morrisons, and Waitrose, emphasizes concerns that significant retailers might face rising business rates under the Government’s planned surcharge affecting properties valued above £500,000.
The proposed surcharge aims to finance discounts for smaller high-street businesses set to benefit from reduced business rates per the Government’s plans. Expected to be confirmed in the upcoming autumn Budget announcement and effective from April, the scheme has drawn attention from supermarket leaders who express worries about absorbing additional costs.
The supermarket bosses stress that any potential tax hikes in the upcoming Budget, like the new surtax on business rates, would make it more challenging for them to offer value to customers, leading to higher household expenses. They highlight the industry’s existing cost burdens, warning of prolonged high food inflation if additional taxes are imposed.
The letter concludes by urging Ms. Reeves to address the disproportionate tax burden on retailers, signaling support for the industry and the Government’s commitment to combating food inflation. Helen Dickinson, Chief Executive of the BRC, highlighted the industry’s efforts to maintain affordable food prices amid financial strains, including over £7 billion in extra costs in 2025 alone.
The Treasury has been approached for comments on the matter.