The supermarket tax burden has become a growing concern as Britain’s biggest retailers warn shoppers could face higher prices. Major grocers have united to pressure Chancellor Rachel Reeves to drop a proposed business rates surtax on large stores.
Tesco, Sainsbury’s, Marks & Spencer, Waitrose, Morrisons, Asda, Aldi, and Lidl all signed the joint letter. The retailers argue that new taxes would raise operating costs and drive food inflation even higher.
The government plans to add a surtax on commercial properties valued over £500,000. While small businesses could see relief, large supermarkets fear extra financial strain.
Retailers say this tax would make it harder to keep food affordable for families already hit by rising living costs. “If the industry faces higher taxes, customers will feel the impact,” the letter warns.
Supermarkets already pay about one-third of all retail business rates despite being a small share of total outlets. Executives believe another tax rise would unfairly increase their financial load.
Helen Dickinson, chief executive of the British Retail Consortium (BRC), said the pressure on supermarkets is already immense. “From national insurance hikes to packaging taxes, costs are rising everywhere,” she said. “We are doing everything possible to keep prices low, but it’s getting harder.”
The supermarket tax burden has reached a critical point, according to the BRC. The group says easing taxes would send a strong signal of government support for the sector.
Retailers insist that reducing costs would help stabilize food prices and support economic recovery. They also argue that retail employs millions and remains vital to local communities.
However, analysts expect the Chancellor to raise taxes in the next Budget. Weaker economic forecasts and fiscal limits have narrowed her options.
Despite these challenges, supermarkets hope the government will reconsider. They argue that extra taxes could reverse progress on curbing food inflation.
The supermarket tax burden continues to dominate discussions within the industry. Retailers say that protecting shoppers should remain a top government priority.
The Treasury has not yet responded to the letter, but further talks are expected before the upcoming Budget announcement.
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