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Food prices in the UK could climb even further if the chancellor raises taxes on supermarkets at the next budget, the industry has warned.

Supermarket bosses, including those at Tesco, Asda, Sainsbury’s and Morrisons, have said in a letter to Rachel Reeves that households would “inevitably feel the impact” of potential tax rises on the sector.

“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. This is not something that we would want to see prolonged by any measure in the budget.”

Pressure is mounting on the chancellor to increase taxes on the budget on 26 November to help to plug a shortfall in public finances.

Supermarkets have complained that they were hit hard at the last budget, when Reeves announced a £25bn increase in employer national insurance contributions and a 6.7% rise in the “national living wage”. The changes came into effect this April.

The British Retail Consortium (BRC) said it was concerned that big shops could also face much higher business rate tax bills if they were included in the government’s new additional tax for properties with a rateable value of more than £500,000.

Helen Dickinson, 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.”

Official data shows that UK inflation was unchanged last month at 3.8%, with annual food price inflation easing from 5.1% in August to 4.5% in September. It was the first time this rate has slowed since March.

However, the cumulative effect means that grocery bills are much higher compared with a few years ago.

The letter, which was also signed by bosses at Aldi, Lidl, Marks & Spencer, Waitrose and Iceland, added that addressing “retail’s disproportionate tax burden would send a strong signal of support for the industry and of the government’s commitment to tackling food inflation”.

A Treasury spokesperson said: “Tackling food inflation is a priority, which is why we’re boosting incomes through increasing the national living wage, lowering business rates for butchers, bakers and other shops, and sticking to our fiscal rules to bring inflation down.”

It is understood the government takes the view that even if a property’s rateable value increases, the way the system works means that its bill could still go down.

Qualys (QLYS) shares are trending slightly higher so far this month, showing around a 1% positive return over the past week. This comes at a time when the broader technology sector continues to face market volatility. Investors are keeping an eye on valuation and trends after recent pullbacks.

See our latest analysis for Qualys.

Zooming out, Qualys’s share price has slipped nearly 8% year-to-date but still posts a positive 1-year total shareholder return of around 6%. This reflects a mix of investor caution and enduring belief in its growth story. The momentum has faded recently, although its longer-term track record highlights an ability to deliver for shareholders.

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With Qualys trading below its analyst price target and fundamentals showing steady growth, the key question now is whether the stock is undervalued and offering potential upside, or if the market has already priced in future gains.

The current narrative fair value for Qualys lands at $141, which is noticeably higher than its last closing price of $128.05. This gap highlights ongoing optimism about the company’s prospects and sets the foundation for the key thinking driving this estimate.

Adoption of Qualys’ new cloud-native risk operations center (ROC) and Agentic AI platform positions the company as a leading pre-breach risk management provider. It offers unified orchestration, automation, and remediation across both Qualys and non-Qualys data. This opens incremental greenfield opportunities and should support higher ARPU and expanded TAM, leading to durable revenue and earnings growth.

Read the complete narrative.

What exactly propels this bullish narrative? Behind the ambitious price target are bold expectations about rising average customer spend, new platform launches and growing demand from global organizations. Want to see how much future growth, profit expansion and technology innovation must deliver in reality to make these numbers stack up? Find out what the consensus is betting on and what needs to go right by reading the full breakdown.

Result: Fair Value of $141 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, rapid AI innovation and new pricing models could disrupt Qualys’s momentum if competitors advance more quickly in development or if customer adoption trends unexpectedly shift.

Find out about the key risks to this Qualys narrative.

Looking at Qualys through the lens of its price-to-earnings ratio, we see some interesting contrasts. The company’s ratio sits at 25x, which is lower than the US Software industry average of 33.3x and well below its peer average of 45.1x. However, it is slightly above the fair ratio of 24.5x, suggesting the market may be pricing in a mild premium for future potential.

See what the numbers say about this price — find out in our valuation breakdown.

If you have a different perspective or want to dig into the figures on your own, you can build a narrative in under three minutes with Do it your way.

A great starting point for your Qualys research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include QLYS.

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