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The heads of the UK's largest supermarkets have penned a letter to Chancellor Rachel Reeves, pleading for an exemption from a proposed business rates surtax. They warn that if this is not granted, customers will ultimately pay the price through increased costs. The letter, orchestrated by the British Retail Consortium (BRC), argues that easing the tax burden on grocers could help combat rising food prices. Signatories include top brass from Tesco , Sainsbury's , Aldi , Asda , Iceland, Lidl , Marks & Spencer, Morrisons and Waitrose. Read more: Birmingham criminals jailed in October 2025 The BRC has expressed concern that larger stores may face a hike in their business rates if they fall under the new surtax, which applies to properties with a rateable value exceeding £500,000. This surtax is intended to offset discounts for smaller high-street businesses, which are set to benefit from reduced business rates under the Government's plans. These proposals are due to be confirmed in next month's autumn Budget statement and would take effect from April next year. In the letter, the supermarket chiefs highlight that their capacity to absorb additional costs is dwindling. They write: "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. "Given the costs currently falling on the industry, including from the last budget, high food inflation is likely to persist into 2026. "This is not something that we would want to see prolonged by any measure in the Budget. "Large retail premises are a tiny proportion of all stores, yet account for a third of retail's total business rates bill meaning another significant rise could push food inflation even higher." The letter concludes by urging Ms Reeves to "address retail's disproportionate tax burden" which it said would "send a strong signal of support for the industry and of the Government's commitment to tackling food inflation". Helen Dickinson, the BRC's chief executive, said: "Supermarkets are doing everything possible to keep food prices affordable, but it's an uphill battle, with over £7 billion in additional costs in 2025 alone. "From higher national insurance contributions to new packaging taxes, the financial strain on the industry is immense." The Treasury has been approached for comment.
