The bosses of Britain’s biggest supermarkets have warned food prices could rise even further if higher taxes are imposed on the sector.
Grocers including Tesco, Asda, Sainsbury’s and Morrisons signed a letter to Chancellor Rachel Reeves ahead of her Budget next month, along with Lidl, Aldi, Iceland, Waitrose and M&S.
They claimed households would “inevitably feel the impact” of any potential tax increases on the industry, such as higher business rates for supermarkets.
The Treasury said tackling food price inflation was a “priority” and said it was lowering business rates for “butchers, bakers and other shops”.
In their letter to the Chancellor, supermarket bosses said if the industry was to face higher taxes, “our ability to deliver value for our customers will become even more challenging and it will be households who inevitably feel the impact”.
“Given the costs currently falling on the industry, including from the last Budget, high food inflation is likely to persist into 2026,” they warned.
“This is not something that we would want to see prolonged by any measure in the Budget.”
Ahead of the chancellor’s Autumn Budget next month, speculation is growing over her tax and spending policies.
She is widely expected to increase taxes following gloomy economic forecasts and a series of U-turns on cuts to welfare spending, which have made it more difficult for her to meet her self-imposed borrowing rules.
After announcing tax rises of £40bn in her previous Budget in November, which included a hike in the amount employers are required to pay in National Insurance Contributions, Reeves said she was “not coming back” for more tax rises.
But economists at the influential Institute for Fiscal Studies (IFS) have calculated a shortfall of £22bn in the public finances and suggested Reeves will “almost certainly” have to raise taxes.
The think tank cited rising borrowing costs for the government, weaker growth forecasts, and spending commitments made since the spring as reasons for the tight position.
Many industries in the run-up to the Budget often call on and lobby their views and position to the government, but rising food prices are once again putting pressure on people’s finances.
The cost of many staples has spiked compared with butter prices up by 19% and milk over 12% along with chocolate and coffee rising 15%, according to the Office for National Statistics.







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