Supermarkets warn food prices could rise with tax hikes
Britain’s largest grocery retailers warned that customers will pay higher food prices if the government raises business taxes in next month’s budget. Leaders from Tesco, Sainsbury’s, Asda, Morrisons, Aldi, Lidl, Waitrose, M&S and Iceland told Treasury officials that households would bear the cost of any new levies.
The companies face over 7 billion pounds in additional expenses for 2025 and worry that proposed changes to commercial property taxes will extend elevated food costs into 2026. Finance Minister Rachel Reeves must address a 22 billion pound budget shortfall caused by weaker economic forecasts and rising borrowing expenses.
Retailers anticipate higher bills under a planned surtax targeting large stores and warehouses with property values exceeding 500,000 pounds. Small shops and restaurants below that threshold would receive rate reductions while major supermarkets and distribution centers would pay more.
Food price increases that peaked above 19 percent in 2023 remain well above historical averages. Butter, milk, chocolate and coffee prices climbed between 12 and 19 percent over the past year despite recent improvements in overall inflation figures.
