Supermarkets tell Reeves tax rises could push food prices higher

"If the industry faces higher taxes in the coming budget such as being included in the new surtax on business rates our ability to deliver value for our customers will become even more challenging, and it will be households who inevitably feel the impact, they wrote in the joint letter. Given the costs currently falling on the industry, including from the last budget, high food inflation is likely to persist into 2026."

"Helen Dickinson, the chief executive of the BRC, said exempting supermarkets from this surtax would help keep food inflation under control. The chancellor has rightly made tackling inflation her top priority, and with food inflation stubbornly high, ensuring retail's rates burden doesn't rise further would be one of the simplest ways to help, she said. This would not cost the taxpayer a penny, with large office blocks and industrial plants, for whom business rates is a smaller proportion of their costs, paying a little more"

Food prices in the UK could rise further if the chancellor increases taxes on supermarkets. Supermarket leaders including Tesco, Asda, Sainsbury's and Morrisons warned that potential tax rises, including inclusion in a new surtax on business rates, would make delivering value harder and that households would feel the impact. Rising industry costs from the last budget are expected to keep food inflation high into 2026. The last budget increased employer national insurance contributions and raised the national living wage. The BRC cautioned that large shops could face much higher business rate bills if included in the surtax and urged exemption to help control food inflation.

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