UK households are bracing for a potential surge in their weekly food shopping costs, as the nation's largest supermarkets issue a stark warning to the government.
Supermarkets Plead with Chancellor
The chief executives of nine major grocery chains, including Tesco, Sainsbury’s, Aldi, Asda, Iceland, Lidl, Marks & Spencer, Morrisons, and Waitrose, have written a joint letter to the Chancellor. They are urging Rachel Reeves to avoid imposing new tax increases on the sector in the upcoming Autumn Budget, which is scheduled for announcement on Wednesday, November 26.
The retail industry is specifically concerned about a potential shake-up to business rates, a tax on commercial properties like shops and pubs, which is planned for 2026. The supermarkets argue that with the sector already facing an additional £7 billion in costs since the last budget, further taxation would be unsustainable.
The Impact on Food Inflation
According to the British Retail Consortium (BRC), these financial pressures are a direct driver of rising food prices for consumers. Helen Dickinson, the chief executive of the BRC, stated that new taxes will “simply push up the cost of food and other essentials”.
She highlighted that this financial strain is a key reason why food inflation has returned to nearly 5 per cent. In their letter, the supermarket bosses echoed this sentiment, warning that “high food inflation is likely to persist into 2026” if the industry faces higher taxes.
Government Response and Broader Economic Context
The government's position was outlined by Business Secretary Peter Kyle. When questioned about pre-budget uncertainty, he shifted focus to the government's inheritance, stating that the “Brexit deal alone has taken 4% of GDP off the whole economy.”
He asserted that this economic impact far outweighs any concerns caused by budget speculation. However, for consumers and retailers alike, the immediate concern remains at the checkout, where the outcome of the Budget could directly translate to higher prices on essential goods.
