More than eight in ten Brits are concerned about rising food prices (83%) and inflation (82%) ahead of today's (28 October) Budget, according to new Opinium polling of over 2,000 UK adults commissioned by the British Retail Consortium (BRC).
BRC's latest Shop Price Monitor, showing a 2.1% rise in shop price inflation for October, the highest since February 2024, appears to reflect those fears. The data also showed food prices up 2.9% over the year.
Retailers facing rising taxes
Retailers are doing everything they can to absorb costs and keep prices as low as possible for customers, but rising taxes have made this all but impossible. The retail industry is facing £41bn in business taxes for 2026/27, a 20% increase in just two years.
Compared with other major economic sectors of the economy, retail, along with hospitality, has the highest effective tax rate, with nearly £3 paid in tax for every £4 of profit (72%). This compares to the financial sector, where the effective tax rate is less than £2 tax for every £4 profit (41%).
Impact on prices and jobs
Retailers want chancellor Healey to support families by finding ways to reduce business costs and balance them more fairly across the economy. Given the central role of retail in the affordability of food and other essentials, any move to increase taxes on retail businesses would inevitably push prices even higher for households.
Without action, business rates will rise by 3.5% in April 2027, in line with the September Consumer Price Index. For retail, which already pays one fifth of the UK business rates, this increase would add approximately another £250m to costs.
BRC said today's Budget offers a real opportunity to deliver jobs and improve living standards for households everywhere. Giving retailers more breathing room on costs would allow more money to be directed to keeping prices down, while also helping the industry to create more opportunities for young people, at a time when there are nearly one million youth NEETs.
Calls on the chancellor
The BRC and its members are calling on the chancellor to raise the employer National Insurance threshold from £5,000 to £6,000, freeze the CPI-linked increase in business rates, and exempt retail premises from the high-value multiplier.
Helen Dickinson, chief executive of the British Retail Consortium, said: “The message from the public is clear: the cost of living remains a top concern. Households, retailers and the Government share a common aim of easing pressure on family finances and fixing the youth employment crisis. The Budget must deliver on both.
“To support this, the chancellor must address the barrage of costs and taxes currently raining down on the industry.
“Chief among these are business rates, which are set to rise by another £250m for retailers next April, and employer NICs, which are up by over £2bn in the last two years. Every pound spent on taxes and regulation is a pound not spent on keeping prices low for consumers.
“Action on business rates and NICs would go a long way to helping retailers deliver even better value for households and more jobs for young people. A Budget for shops and shoppers is also a Budget for communities everywhere.”
