Supermarket bosses have urged the Chancellor to shield shops from a forthcoming business rates surtax, arguing that higher bills would be passed to shoppers. The appeal, organised by the British Retail Consortium (BRC) and addressed to Rachel Reeves, contends that reducing the tax burden on grocers would help tackle food inflation. Signatories include executives from Tesco, Sainsbury’s, Aldi, Asda, Iceland, Lidl, Marks & Spencer, Morrisons and Waitrose. The BRC said large stores could face higher rates if the levy applies to properties with a rateable value above £500,000, and the plans are due to be outlined in the autumn Budget statement next month with effect from April.

The letter states that the industry’s ability to absorb additional costs is diminishing. It reads: “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.” It adds that high food inflation is likely to persist into 2026, noting that “Large retail premises are a tiny proportion of all stores, yet account for a third of retail’s total business rates bill meaning another significant rise could push food inflation even higher.”

The letter concludes by asking Ms Reeves to “address retail’s disproportionate tax burden” which it said would “send a strong signal of support for the industry and of the Government’s commitment to tackling food inflation.” Helen Dickinson, the BRC’s chief executive, said: “Supermarkets are doing everything possible to keep food prices affordable, but it’s an uphill battle, with over £7 billion in additional costs in 2025 alone. From higher national insurance contributions to new packaging taxes, the financial strain on the industry is immense.” The Treasury has been contacted for comment.