Tesco, Sainsbury’s, John Lewis and Boots are among a list of retailers that have warned Chancellor Rachel Reeves that additional tax increases will undermine Labour’s promise to improve living standards in the UK.

The retail giants claimed that food price inflation could rise to 6% this year following the government’s decision to raise taxes and increase the national minimum wage.

They warned the government risks breaching its manifesto pledge to provide “good jobs and higher living standards”, as companies will not be able to “absorb” any more costs.

The businesses, which are represented by the British Retail Consortium (BRC), raised concerns over the government’s plans to raise business rates on larger stores with a rateable value of more than £500,000 next year in exchange for lower taxes on smaller properties.

The Financial Times reported last week that the higher taxes, which will be confirmed at the Autumn Budget, could tip more than 100 supermarkets run by the UK’s biggest grocers into the red as costs pile up on the industry.

In a letter to the chancellor, seen by The Times, the retailers stated that government-imposed costs have already added £7bn to their businesses this year and similar increased costs “are also starting to flow through our supply chains”.

The companies wrote: “As retailers, we have done everything we can to shield our customers from the worst inflationary pressures but as they persist, it is becoming more and more challenging for us to absorb the cost pressures we face.

“Food prices — which had begun to ease — are once again climbing. The British Retail Consortium expects food inflation to hit 6% later this year, driving up household bills just as winter energy costs start to kick in. The impact is further being felt by communities as retail investment falls and 100,000 retail jobs have been lost over the last year alone.”

The letter continued: “Labour’s manifesto made a clear and welcome promise to deliver good jobs and higher living standards but if future policy decisions lead to rising prices and fewer jobs, then those commitments are at risk.

“Instead, the retail industry is uniquely placed to help deliver the government’s central economic mission given our presence in almost every community across the UK,” the added.

The BRC’s letter has been signed by Aldi, Boots, Currys, Ikea, JD Sports, John Lewis, Kingfisher, Lidl and Morrisons. It is expected to attract more signatures in the next few days.

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