UK Supermarket Bosses Urge Chancellor to Exempt Stores from Business Rates Surtax

Strategic Insights -

UK bosses of major supermarkets, including Tesco, Sainsbury's, and Marks & Spencer, have written a joint letter to Chancellor Rachel Reeves, urging her to exempt large retail premises from the new business rates surtax. They argue that this would help alleviate the strain on the industry, which is already facing significant costs, including over £7 billion in extra expenses in 2025.

The British Retail Consortium (BRC) organized the letter, signed by executives from several major supermarket chains, expressing concern that large shops could see their business rates rise if they are included in the new surtax. They claim that this would lead to higher costs for consumers, particularly in the context of persisting food inflation, which is likely to continue into 2026.

Key Takeaways:

  • UK supermarket bosses have written a joint letter to Chancellor Rachel Reeves, urging her to exempt large retail premises from the new business rates surtax.
  • The letter argues that exempting large retail premises from the surtax would help alleviate the strain on the industry, which is facing significant costs, including over £7 billion in extra expenses in 2025.
  • The BRC claims that large retail premises already account for a third of retail's total business rates bill, making another significant rise a potential concern.
  • Supermarket bosses warn that higher taxes will make it more challenging for them to deliver value to customers, who will inevitably bear the impact of increased costs.
  • The letter concludes by asking Ms. Reeves to address the retail industry's disproportionate tax burden and send a strong signal of support for the industry and its commitment to tackling food inflation.

Statistics:

  • £7 billion: The extra costs faced by the supermarket industry in 2025 alone, according to the BRC.
  • 33%: The proportion of retail's total business rates bill accounted by large retail premises.
  • 2026: The year in which persistent food inflation is likely to continue, according to the letter.
  • 2025: The year in which the supermarket industry is expected to face significant costs, including over £7 billion in extra expenses.

Sources:

  • "UK supermarket bosses to urge Chancellor to exempt stores from business rates surtax", Anna Wise, unattributed.

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