The UK’s planned business rates rise will tip more than 100 supermarkets run by the likes of Sainsbury’s, Tesco and Morrisons into the red as costs pile up on the industry.

Around 50 of Sainsbury’s 600 larger stores will become unprofitable, while Tesco will see “tens of stores” tip into the red, The Financial Times reported.

It comes as the government is planning to raise business rates on properties with a rateable value of more than £500,000 next year, which will help fund a discount on smaller retail and hospitality outlets.

Sainsbury’s and Tesco are expected to better weather the cost increases after the two grocery giants reported net profits of £420mn and £1.2bn respectively last year.

One insider told the title that the changes put 30 of Morrisons almost 500 stores at risk, while another said around 90% of Asda’s 600 supermarket estate would be impacted by the higher property taxes.

It is understood that the business rates rise do not largely impact Aldi and Lidl, which typically trade from smaller stores.

Property experts at Colliers estimate less than 10% of Lidl’s stores will be impacted by the proposed changes.

The Treasury said: “We are creating a fairer business rates system to protect the high street, support investment and level the playing field.

“We intend to introduce permanently lower tax rates for retail, hospitality, and leisure properties from next year. Unlike the current relief for these properties, there will be no cash cap on the new lower tax rates.”

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