(Commonwealth_Europe) Britain’s biggest supermarket chains have come together to urge the government to rethink new tax proposals that they say could make it harder to keep food prices in check for struggling households.
In a joint letter to Chancellor Rachel Reeves, industry leaders from Tesco, Sainsbury’s, Aldi, Asda, Iceland, Lidl, Marks & Spencer, Morrisons, and Waitrose warned that raising business rates for large retailers would only deepen the pressures already weighing on the grocery sector. The letter, organized by the British Retail Consortium (BRC), argues that the government should ease the tax burden on major food retailers if it truly wants to tackle food inflation.
At the heart of their concern is a planned “surtax” on properties with a rateable value above £500,000, which could see big supermarkets paying even more in business rates. The move is expected to help fund tax relief for smaller high-street firms, but grocers fear it could have unintended consequences—pushing up costs for millions of consumers. The final details of the policy are due to be confirmed in the government’s autumn budget next month, with changes likely to take effect from April.
In their letter, the supermarket bosses warn that their capacity to absorb extra costs “is diminishing.” They caution that if the new surtax goes ahead, “our ability to deliver value for our customers will become even more challenging and it will be households who inevitably feel the impact.”
The letter also raises the alarm over persistently high food prices, noting that inflation in the sector could stretch well into 2026 if costs continue to pile up. “This is not something that we would want to see prolonged by any measure in the Budget,” the executives wrote. They pointed out that large retail stores make up only a small fraction of all UK shops but already shoulder around one-third of the total business rates bill, a burden that, if increased, could make food even pricier.
The signatories call on Reeves to “address retail’s disproportionate tax burden,” saying such action would “send a strong signal of support for the industry and of the Government’s commitment to tackling food inflation.”
Helen Dickinson, chief executive of the BRC, said supermarkets were “doing everything possible to keep food prices affordable,” but the challenge was becoming harder each year. “It’s an uphill battle,” she said. “The industry is facing over £7 billion in additional costs in 2025 alone—from higher national insurance contributions to new packaging taxes. The financial strain on retailers is immense.”
As families across the UK continue to grapple with the cost of living, supermarket leaders say the government’s next move could make the difference between stabilizing prices and pushing everyday essentials further out of reach. The Treasury has been contacted for comment.
