The lobbying group for the UK retail industry wants the government not to raise taxes on the sector, and has commissioned a survey among the public that has found out that concerns around rising real inflation outweigh worries about tax rises.
Of the 2,000 adults surveyed in the British Retail Consortium (BRC) poll, the biggest concern was "prices rising faster than wages" at 57% of respondents, or 61% among working people.
This was higher than the 49% concerned about tax rises and 26% about rising unemployment.
UK inflation was 3.8%, according to last week's official figures from the ONS, while food inflation was 5.1%, the highest level since the cost of living crisis in 2022/23.
Ahead of the second Budget from Chancellor Rachel Reeves, the BRC suggested food inflation has been accelerated by its members having to raise prices due to the impact of the previous Budget, which increased employment costs and made retailers (finally) pay for the recycling of some of their plastic packaging.
The BRC warned that "food inflation will rise and remain above 5% well into 2026 if the retail industry is hit by further tax rises at the Autumn Budget".
While the government has pledged to bring down business rates for retail, hospitality and leisure premises, the lobbying group said around 4,000 large shops could see their rates rise if they are included in the Government’s new business rates surtax for properties with a rateable value over £500,000.
Helen Dickinson, BRC chief executive, said: "The Treasury is currently finalising its plans to support the high street, including a much-needed reduction in business rates for retail, hospitality and leisure premises.
"However, the biggest risk to food prices would be to include large shops – including supermarkets – in the new surtax on large properties. This would effectively be robbing Peter to pay Paul, increasing costs on these businesses even further and forcing them to raise the prices paid by customers. Removing all shops from the surtax can be done without any cost to the taxpayer, and would demonstrate the Chancellor’s commitment to bring down inflation."
Many large retailers have been raising prices so that they can continue making large profits.
Tesco PLC (LSE:TSCO), for example, reported a £3.1 billion profit for the past year to February, up 10.6% year-on-year, and warned that the increase in new costs and recent upping of competition from Asda will only dent its profit to around £2.7-3 billion for the current year.
In non-food, Next PLC (LSE:NXT) reported a £1 billion profit.