Supermarkets warn tax rises could drive food prices higher

"Given the costs currently falling on the industry, including from the last Budget, high food inflation is likely to persist into 2026,"

"This is not something that we would want to see prolonged by any measure in the Budget."

"Retailers are doing everything possible to keep food prices affordable, but it's an uphill battle with more than £7 billion in additional costs expected in 2025 alone. The simplest way to help would be to ensure business rates don't rise further."

Executives from Tesco, Sainsbury's, Asda, Morrisons, Aldi, Lidl, Waitrose, M&S and Iceland warned that increases in business rates or other levies would push food prices higher and that households would inevitably feel the impact. They said current cost pressures, including measures from the last Budget, make high food inflation likely to persist into 2026. Retailers expressed particular concern about a proposed business rates surtax targeting large premises above £500,000 rateable value, which would raise bills for major stores and distribution hubs. The British Retail Consortium noted large locations pay around one-third of the sector's business rates and cited more than £7 billion in extra costs expected in 2025.

Read at Business Matters