Sainsburys boss warns tax rises could mean higher prices for shoppers

Simon Roberts chief executive of Sainsburys has issued a stark warning to Chancellor Rachel Reeves over the potential impact of increased costs in the supermarket sector. Writing ahead of the highly anticipated autumn budget Roberts stressed that heavier tax or regulatory burdens could directly drive price rises for British shoppers.

The head of the UKs second largest grocer expressed serious concerns about the industrys delicate margins. He highlighted growing challenges including increased business rates national insurance hikes and mounting regulatory requirements all compounding the already significant cost pressures faced by supermarkets. Sainsburys estimates that the recent increase in national insurance contributions alone will cost the company around £140 million annually.

Roberts pointed out that supermarkets are notorious for their razor thin profit margins averaging just 3 to 4 per cent. He stated that relentless focus on cost saving measures is essential simply to keep inflationary pressures in check. Business rates he remarked are a particular burden costing Sainsburys over £500 million each year.

The government has reportedly considered excluding supermarkets from a proposed higher tier of business rates set to take effect in April. Roberts described lobbying efforts against this policy shift noting senior level conversations between industry leaders and government officials. The message from the supermarket sector has been unequivocal no more cost increases if food price inflation is to be contained.

Despite economic headwinds Sainsburys is continuing its ambitious expansion plan aiming to open its largest number of new stores in over a decade. The group operates more than 1475 shops across the country encompassing the Tu Clothing Habitat and Argos brands and now commands a 153 per cent market share second only to Tesco. Sainsburys currently employs over 140000 staff nationwide.

Reflecting market confidence Sainsburys shares rose by nearly one per cent to 344p following Roberts comments. His remarks set the stage for robust debate between retailers and policymakers in the run up to the budget as the government faces mounting pressure to protect consumers from the effects of food price inflation.