Retailers warn of rising prices

Large retailers, including Tesco, Sainsbury’s, John Lewis and Boots, have warned that the Government’s tax plans could jeopardise living standards in a signed letter to the Chancellor sent by trade body British Retail Consortium (BRC).

The retailers argue that proposed tax increases and rising business rates may lead to a 6% rise in food prices. The British Retail Consortium says that additional costs from National Insurance and minimum wage hikes have already added £7 billion to retailers’ expenses.

It warns that further tax rises on businesses could result in the Labour Government breaking its manifesto pledge to provide high living standards. In addition, many businesses have seen their labour costs rise thanks to the rate of employer national insurance being increased in last year’s Budget.

Some retailers have blamed the tax hike for the decision to raise prices in shops, which they say has allowed them to partly mitigate the impact. Others have resorted to cutting staff or freezing hiring, while some businesses said they were absorbing the higher costs into their profits.

But in the letter signed by more than 60 chief executives, it says: ‘As retailers, we have done everything we can to shield our customers from the worst inflationary pressures but as they persist, it is becoming more and more challenging for us to absorb the cost pressures we face.’

The letter continued, ‘As the chief executives of many of Britain’s leading brands, we are determined to help deliver your growth ambitions. However, for this to be possible, the conditions for stable prices, continued investment and sustainable employment must be at the heart of this year’s Budget.’