Britain’s supermarket giants have united to warn that a rise in business rates could drive up costs.

Britain’s major supermarkets are pressuring the Chancellor to exempt them from the new business rates charge, warning consumers will ultimately face higher prices.

A letter to Rachel Reeves from the British Retail Consortium (BRC) argues that limiting the tax burden on grocers is vital to tackling food inflation. It has been signed by UK executives and directors of Tesco, Sainsbury’s, Aldi, Asda, Iceland, Lidl, Marks & Spencer, Morrisons and Waitrose.

The BRC said it is concerned that big shops could see their business rates rise if they are included in the government’s new additional tax for properties worth more than £500,000.

This is expected to cover the discount for smaller high-street firms, which will be subject to lower business rates under the government’s plans.

The plans will be confirmed in next month’s autumn budget statement and will come into force from next April.

In the letter, supermarket bosses say their “ability to afford additional costs is diminishing”.

It reads: “If the industry faces higher taxes in the upcoming Budget – such as being included in the new surcharge on business rates – our ability to deliver value to our customers will be even more challenged and it will be households who will inevitably feel the impact.

“Given the costs currently falling on the industry, including in the last Budget, high food inflation is likely to persist through 2026.

“This is not something we would like to see in the budget for a long time by any measure.

“Large retail premises make up a small proportion of all shops, yet account for a third of the total rates bill for retail trade, meaning another significant increase could push food inflation even higher.”

The letter concludes by calling on Ms Reeves to “address retail’s disproportionate tax burden”, saying this would “send a strong signal of support for the industry and the Government’s commitment to tackling food inflation”.

Helen Dickinson, chief executive of the BRC, said: “Supermarkets are doing everything they can to keep food prices affordable, but it is an uphill battle, with additional costs of more than £7 billion in 2025 alone.

“From higher National Insurance contributions to new packaging taxes, the financial pressures on the industry are immense.”

The Treasury has been contacted for comment.