In a collective cry that could curdle milk, the chiefs of Britain’s grocery giants—from Tesco to the thrifty twins Aldi and Lidl—have dashed off a desperate letter to Chancellor Rachel Reeves, warning that any tax hikes on their empire could send food prices soaring higher than a poorly aimed drone delivery.
With the Autumn Budget looming like a storm cloud over your cereal bowl, these retail royals insist households will bear the brunt, turning everyday errands into extravagant escapades.
The open missive, signed by an all-star lineup including Asda, Sainsbury’s, Morrisons, Iceland, Waitrose, and even posh M&S, paints a picture of fiscal Armageddon.
“Our ability to deliver value for our customers will become even more challenging,” they wail, as if passing on costs is just a cheeky suggestion rather than the fine print on your loyalty card.
Picture this: higher business rates slapping supermarkets like an unexpected checkout fee. The bosses argue that if Reeves tightens the screws, high food inflation—already lingering like that one guest who won’t leave the party—could drag into 2026, making your morning coffee feel like a splashy splurge.
While the Treasury trumpets relief for humble butchers and bakers with lower rates, the big-box brigade points out they’re the ones shouldering a third of retail’s rates burden despite being a “tiny proportion” of stores. It’s like giving the ants a picnic while the elephants foot the bill for the gazebo.
Global gremlins like droughts, diseases, and dodgy harvests have already jacked up staples skyward. Butter’s ballooned 19%, milk’s meandered up over 12%, and chocolate with coffee? A cheeky 15% climb, per the Office for National Statistics—because nothing says “recession chic” like rationing your cocoa.
Helen Dickinson, the British Retail Consortium’s unflappable CEO, admits retailers are battling uphill with a £7 billion cost avalanche in 2025 alone, courtesy of taxes and wage whims.
“We’re doing everything possible to keep food prices affordable,” she says, though one suspects “everything” stops short of printing money in the bakery aisle.
Tesco’s Ken Murphy, ever the straight-talker, has hollered “enough is enough” on business taxes before, blaming a £235 million National Insurance sting for the squeeze.
Yet, in a plot twist worthy of a soap opera, Tesco’s just upgraded its profit forecast to a bouncy £2.9 billion to £3.1 billion—proving even in tough times, someone’s half-price vouchers are paying off.
Over at Lidl, it’s less sob story and more success saga: profits tripled to £156.8 million, sales leaping 7.9% like a discount-hunter spotting bogof deals. If that’s the “struggle,” sign this reporter up for the hardship.
But back to the budget bonanza. Reeves, fresh off £40 billion in tax tweaks last November, swore she wasn’t circling back for seconds. Alas, the Institute for Fiscal Studies smells a shortfall of £22 billion, courtesy of borrowing blues, growth groans, and welfare wobbles—leaving her election pledge on income tax looking as sturdy as wet cardboard.
Supermarket suits zero in on business rates reforms, decrying a surtax on mega-premises that hits their vast warehouses harder than a rogue shopping cart. They beg for a “significant reduction” to ease the load, noting it’s the “simplest way” to tame inflation without turning porridge into a pauper’s protest.
The Treasury, ever the optimist, counters that rates will auto-adjust with property values—meaning if your local superstore’s rateable value inflates like a overproofed loaf, the tax multiplier might dip just enough to keep the peace. “What businesses pay depends on both the new RVs and the adjusted tax rate,” they explain, in prose drier than yesterday’s crackers.
Still, as speculation swirls over Reeves’ next moves—targeted cost-of-living tweaks, perhaps, or a sly income tax nudge—the grocers’ chorus rings clear: spare us the surtax, or prepare for pricier provisions. In a nation where the weekly shop already rivals a small mortgage, who knew the real basket case was the one in Whitehall?
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