Bosses of UK supermarkets and High Street chains warn Rachel Reeves that new business taxes will force them to hike prices in a fresh blow to Brits' living standards
They suggested they would not be able to 'absorb' a further increase in costs, which could see prices rise for consumers and deliver a fresh hit to Brits' living standards.
Tesco, Sainsbury's, John Lewis, Morrisons, Aldi, Lidl, Ikea, Boots, JD Sports, Currys and Kingfisher are among those to have signed a letter to the Chancellor.
They pointed to how Government policies had already 'added £7billion in new costs to retail businesses'.
This included Ms Reeves' hike to employers' National Insurance contributions, an increase in the minimum wage, and the introduction of a new packaging tax.
The retailers, who are part of the British Retail Consortium, warned that further tax rises for businesses would leave Labour at risk of breaching its manifesto pledges.
Prior to last year's general election, Sir Keir Starmer's party pledged to boost economic growth and families' living standards.
Official figures published yesterday showed the headline rate of inflation rose by more than expected last month to 3.8 per cent.
This was the highest level since January 2024, while food and drink inflation rose to 4.9 per cent in July from 4.5 per cent in June.
Ms Reeves admitted there was 'more to do to ease the cost of living' following the figures.
The British Retail Consortium said Labour policies had 'driven up the costs of employment' and were 'fuelling price rises at the till'.
In their letter to the Chancellor, which was due to be delivered to the Treasury today, the retailers said they had '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,' it added.
'This year Government policy has added £7 billion in new costs to retail businesses, resulting from changes to employer national insurance, higher employment costs, and the introduction of a new packaging tax.
'Similar increased costs are also starting to flow through our supply chains.
'Food prices - which had begun to ease - are once again climbing. The British Retail Consortium expects food inflation to hit 6 per cent later this year, driving up household bills just as winter energy costs start to kick in.
'The impact is further being felt by communities as retail investment falls and 100,000 retail jobs have been lost over the last year alone.
'Labour's manifesto made a clear and welcome promise to deliver good jobs and higher living standards but if future policy decisions lead to rising prices and fewer jobs, then those commitments are at risk.
'Instead, the retail industry is uniquely placed to help deliver the Government's central economic mission given our presence in almost every community across the UK.'
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.'
The retail bosses also warned a planned overhaul of business rates should not increase the burden on shops.
'No store should pay more as a consequence, with all shops excluded from the new higher multiplier,' the letter said.
Helen Dickinson, the chief executive of the British Retail Consortium, said: 'Retailers have gone to extraordinary lengths to shield customers from rising costs, but Government policy is making that harder by the day.
'The Chancellor must ensure a significant reduction to retail's rates burden and that no shop pays more at the upcoming autumn Budget.'
A Treasury spokesman said: 'We are a pro-business Government - 380,000 jobs have been created since the start of this parliament and business confidence is at a ten-year high, according to a recent Lloyds Bank survey.
'Since the election, we have struck three major trade deals with the EU, US and India, business rates are being reformed and corporation tax is capped at 25 per cent.'
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