Leading grocers have written to chancellor Rachel Reeves, setting out the case for excluding shops from the planned business rates surtax.
The bosses of Aldi, Asda, Iceland, Lidl, Marks & Spencer, Morrisons, Sainsbury’s, Tesco and Waitrose have all signed the letter, coordinated by the BRC.
They warned that unless stores are excluded from the surcharge, grocers’ “ability to absorb additional costs is diminishing”.
The chancellor hopes to bring down inflation as many consumers continue to suffer amid an ongoing cost-of-living crisis, during which food prices have climbed.
The retailers, whose companies have shouldered steep cost increases following last year’s Budget and face a particular rates hit because they typically operate large shops, argued: “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.”
BRC chief executive Helen Dickinson said: “Supermarkets are doing everything possible to keep food prices affordable, but it’s an uphill battle, with over £7bn in additional costs in 2025 alone. From higher national insurance contributions to new packaging taxes, the financial strain on the industry is immense.
“Large retail stores sustain nearly 1 million British jobs and already contribute a third of all retail’s business rates, despite being a tiny proportion of all stores. This letter calls on the chancellor to exempt shops from the new business rates surtax, levied on all large commercial premises. This would not only help to tackle food inflation but would support jobs and investment right across the country.
“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. This would not cost the taxpayer a penny, with large office blocks and industrial plants, for whom business rates are a smaller proportion of their costs, paying a little more.”
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