Retailers warn chancellor that tax rises would push up food prices

An increase in costs such as business rates for large stores and supermarkets would “add to inflation at the worst possible moment”, according to BRC chief executive Helen Dickinson, The Sunday Times reported.

Separately, the bosses of Sainsbury’s and Tesco warned that a rates rise would put further pressure on troubled high streets, the Telegraph reported. 

Tesco chief executive Ken Murphy signalled: “Increasing the burden on large shops would hinder rather than help our town centres. Many of these shops are anchor stores in their local communities.”

Sainsbury’s chief executive Simon Roberts said that big retailers might “pull away from our high streets” because of higher costs.

He said: “The changes being proposed will further increase the negative impact of business rates and won’t stimulate the growth or investment into our high streets and jobs that we all want to see.”

Dickinson said many retailers were “already at breaking point” as a result of last autumn’s tax rises. Linking the issue to the Bank of England base rate, she cautioned that a further burden “risks pushing up prices just as families are hoping for relief and at a time when the Bank of England is trying to bring inflation down”.

Reeves faces challenges in the run-up to the Budget because economic headwinds are being felt and the government’s financial plans were hit by a rebellion that has left her with less room for manoeuvre. That has led to fears among businesses that more tax increases will be imposed on them.

From next April, supermarkets and large shops such as department stores may be hit with an increase in business rates to bring down the amount paid by smaller retailers.

According to the BRC, about 4,000 larger stores could be affected at a cost of about £600m. That would force retailers to pass on the extra expense to consumers.