Retailers have warned that further tax hikes in Rachel Reeves’ upcoming autumn budget could lead to higher prices and fresh job cuts across the sector.

A new British Retail Consortium (BRC) survey of retail finance directors revealed that two-thirds expect to raise prices over the next year, while 88% listed tax and regulation as their top concern — up sharply from 62% in January.

The warning follows a series of cost increases brought in since Labour came to power in 2024, including a rise in employer National Insurance contributions and a 6.7% increase to the national living wage. The BRC estimates that retail businesses have already been hit with £7bn in additional costs and taxes.

BRC chief executive Helen Dickinson said: “Retail was squarely in the firing line of the last budget, with the industry hit by £7bn in new costs and taxes. Retailers have done everything they can to shield their customers from higher costs, but given their slim margins and the rising cost of employing staff, price rises were inevitable.

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“Retail accounts for 5% of the economy yet currently pays 7.4% of business taxes and a whopping 21% of all business rates. It is vital the upcoming reforms offer a meaningful reduction in retailers’ rates bill, and ensure no store pays more as a result of the changes.”

Major chains including Iceland, New Look and Poundland have already announced store closures in recent months as the pressure on operating costs mounts.

The BRC survey also found that 42% of respondents had introduced recruitment freezes, while 38% had already reduced headcount. The lobby group said this highlights growing concern over the sector’s ability to absorb any further cost burdens.

The warnings come amid speculation that the chancellor may raise up to £25bn through new tax measures in the autumn to plug a public spending gap. One option reportedly under review is an extension to the freeze on income tax thresholds.

This latest warning comes amid broader industry backlash against Reeves’s business rates reforms, with Tesco and Sainsbury’s chiefs recently cautioning that the planned tiered system risks accelerating high street decline by increasing costs for large stores.

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