By Editor,Emily Hawkins

Copyright dailymail

The boss of Aldi has warned Rachel Reeves not to hike supermarket’s costs at her upcoming Budget, as sales topped £18billion in the UK and Ireland last year. The discounter became the latest in a chorus of businesses raising concerns about the impact of potential tax hikes on food prices.

Giles Hurley, chief executive of Aldi UK, said: ‘Any policies which affect the operating costs of business should be considered very, very carefully because of the very real risk they find their way… back into the food system and onto prices.’ Recent increases including the hike in employer National Insurance contributions and a new packaging levy have already ‘rippled through to prices on the shelf edge,’ he added to the BBC.

And shoppers are still ‘finding things difficult’ he explained, as more Brits flocked to the German retailer this year. The retailer said it made £18.1billion in sales last year, compared to £17.9billion in 2023.

But it said profits were hit by a fierce price war between rivals including fellow discounter Lidl and traditional heavyweights Tesco and Sainsbury’s. Profits fell from £552.9million to £435.5million as the business invested in prices, infrastructure and boosting staff wages. Its market share has grown to 10.8 per cent, according to figures from data firm Worldpanel last month.

Hurley said: ‘Shoppers are still finding things difficult and that’s why we’re staying laser focused on doing what Aldi does best – offering customers great quality products at unbeatable prices. ‘Nobody else is making the same commitment to everyday low prices – no clubs, no gimmicks, no tricks – just prices our customers can trust and quality they can depend on.’

His comments came as trade group the Food and Drink Federation (FDF) warned that food inflation could hit 5.7 per cent by the end of December. It was 4.2 per cent in August, according to the British Retail Consortium. Retailers have urged the government to rule out further increases to the cost of doing business, as well as taking a second look at its reform business rates.

The sector says thousands of big shops will be forced to pay more under the Chancellor’s proposals, which could lead to more job losses and store closures. Aldi boss Hurley said the industry was still waiting for the ink to dry on business rates changes, but that Labour should ‘consider very carefully’ any potential cost increases.

‘We do need domestic policy which challenges that stubborn inflation that we’re seeing at the moment. And therefore we would encourage the government to adopt policies which don’t inadvertently add to the costs of businesses in the food sector.’ And he said the Budget – which has been called for 26 November, later than usual – had ‘no doubt’ created ‘a bit of uncertainty’ among consumers.

He added: ‘If you ask customers, the inflationary challenges are just tremendously challenging because they come on top of bills elsewhere going up. So they’re really unwelcome [for households]. Groceries have become a bigger portion of household income.’ Shoppers have increasingly been ‘treating themselves’ with premium dine-in meals instead of going to restaurants, he said.