Tesco Pushes Back Ahead of November Budget
UK’s largest supermarket chain, Tesco, has sent a strong warning to the government ahead of the 26 November Budget. Chief executive Ken Murphy said that British retailers are already under heavy pressure from rising costs, and that “enough is enough” when it comes to new taxes.
Murphy reminded policymakers that the last Budget added substantial costs to the retail sector, and warned that a repeat this year could make it harder for supermarkets to keep prices low for customers.
Rising Costs Squeeze UK Retailers
The company highlighted how higher National Insurance contributions (NICs) alone have added an extra £235 million to Tesco’s operating expenses this year.
On top of this, the government’s Extended Producer Responsibility (EPR) program — which requires retailers and producers to pay councils for packaging recycling — has created another huge expense. Tesco has already set aside £90 million to cover these charges.
Industry experts, including the Food and Drink Federation (FDF), warn that the EPR levy could cost UK producers £1.1 billion in total, a bill that will almost certainly filter down to consumers through higher food prices.
Profit Forecast Still Upgraded
Despite the added expenses, Tesco has upgraded its annual profit forecast, now expecting adjusted operating profits of £2.9 billion to £3.1 billion for the year.
According to the company, shoppers are buying more groceries overall, even as the retailer cuts prices on thousands of products to stay competitive. This combination of higher sales volume and operational efficiency has boosted confidence in its year-end outlook.
Union Accuses Tesco of Profiting During Crisis
Not everyone welcomed Tesco’s financial update. The Unite union accused the supermarket of “profiteering from the cost of living crisis,” arguing that while households are struggling with high food prices, Tesco is rewarding shareholders with big dividends.
Unite’s general secretary Sharon Graham urged the Labour government to step in, saying: “Workers must no longer pay the price for corporate greed.”
Impact on Shoppers and the Wider Market
The stakes are high for UK consumers. With food and non-alcoholic drink inflation running at 5.1% annually, essentials such as beef, butter, milk, and chocolate remain stubbornly expensive.
Murphy acknowledged that shoppers are becoming more cautious, with many waiting to see what the Chancellor announces before making big spending decisions. He noted a shift in consumer habits, with families cooking more meals from scratch to save money.
What Tesco Wants from the Budget
Murphy’s message to the Treasury was direct: “Our one ask is don’t make it harder for the industry to deliver great value for customers.”
Tesco is calling for a Budget that supports jobs, encourages growth, and avoids additional taxes that could drive up prices even further.
Final Take
The battle over business taxes puts the UK’s retail industry at a crossroads. For Tesco, higher NICs, packaging levies, and commodity prices are already eroding margins. Another round of government-imposed costs could hit both retailers and consumers hard.
As the 26 November Budget approaches, the clash between government tax policy, corporate profits, and consumer protection is set to intensify. Tesco’s warning — “enough is enough” — may well become the rallying cry for the entire UK retail sector.
