Tesco, Asda, Aldi, Primark and Sainsbury’s issue warning over prices saying it's a 'certainty'

The UK’s biggest retailers have warned the Chancellor that they will be forced to cut jobs and increase prices as they face a more-than-£7 billion hit from Budget tax increases.

More than 70 businesses, including shopping giants Tesco, Asda and Sainsbury’s, have told Rachel Reeves in an open letter that the changes announced in last month’s Budget mean price hikes are a “certainty”.

In the budget announcement Ms Reeves revealed a £25.7 billion change to employers’ national insurance contributions, which would increase the rate of the tax and the threshold firms must pay.

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Businesses have said the Budget policy measures, which also included packaging levies and increases to the national minimum wage, will cost the industry more than £7 billion a year.

The letter was arranged by the British Retail Consortium and was signed by many household names including Amazon, Aldi, Boots, B&Q, Currys, Greggs, JD Sports, Marks & Spencer, Next and Primark.

The letter said: “We appreciate Government’s focus on improving the fiscal situation and investing in public services; we also recognise the role businesses have in supporting this.

“But the sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable, and higher prices a certainty.”

The group said they would “welcome” the chance to meet Ms Reeves and discuss potential changes including phasing the introduction of the national insurance lower earnings threshold, delaying timelines for packing levy implementations and revisiting business rates proposals announced in the Budget.

The letter said: “By adjusting the timings of some of these changes, the Government would give businesses time to adjust and greatly mitigate their harmful effects on high streets and consumers.”

This comes after warnings by a number of bosses across the sector in recent weeks.

Earlier this month Sainsbury’s boss Simon Roberts said that the tax hikes would mean higher inflation for shoppers, and Asda warned that it would face an extra £100 million in costs due to the Budget.

Another joint letter organised by UK Hospitality earlier this month shared the same message. Some bosses revealed that minimum wage jobs could become “unviable” as a result of the new national insurance contributions threshold.

Last week Prime Minister Sir Keir Starmer defended the Budget’s “tough” fiscal decisions amid rising criticism.

Ministers have also come under pressure from farmers and opposition parties to scrap its changes to agricultural inheritance tax, which they warn could hit family farms hard.

The National Farmers’ Union (NFU) is holding a mass lobby of MPs with 1,800 of its members on Tuesday to urge backbenchers to stand up to the Government’s plans to impose inheritance tax on farms worth more than £1 million.