Tesco Boss Sounds Alarm: Upgraded Profit Forecast Hinges on No New Business Taxes

Tesco Boss Warns Reeves Against Further Business Taxes as Retailer Upgrades Profit Forecast Tesco, the UK's largest supermarket chain, has upgraded its profit forecast for the year to up to £3.1 billion, despite warning Chancellor Rachel Reeves against adding extra costs to businesses in the upcoming Budget. The company's boss, Ken Murphy, said that "enough is enough" when it comes to business taxes, following a wave of increased operating costs since April, including higher employer National Insurance contributions (NICs) and minimum wages. Tesco has also been hit with the cost of Extended Producer Responsibility (ERP) levies, which came into force last month. The ERP programme requires food and drink companies to pay for the cost of recycling their packaging, a move that is expected to cost UK producers £1.1 billion this year, according to the Food and Drink Federation (FDF). Tesco has set aside £90 million in ERP levies, which it expects will be passed on to consumers. The warning from Tesco comes as Chancellor Reeves prepares to unveil her Budget on November 26, with many expecting some taxes to increase. The move is likely to be welcomed by other retailers and businesses, who have also been hit with increased costs since April. "The industry incurred substantial additional operating costs in the last Budget," Murphy said. "We don't want to see a repeat of that this time around." The upgrade to Tesco's profit forecast comes despite a challenging market environment, which has seen food price inflation and supply chain disruptions. The company's shares have risen 2% since the start of the year, outperforming the broader FTSE 100 index. Market analysts say that the upgrade is a positive sign for the retail sector, but also highlight the challenges faced by businesses in the UK. "The upgrade suggests that Tesco is well-positioned to navigate the current market environment," said one analyst. "However, the industry still faces significant headwinds, including rising costs and consumer uncertainty." Stakeholders are closely watching the Budget announcement, with many expecting Reeves to introduce measures to support businesses and consumers. However, the warning from Tesco suggests that some companies may be bracing themselves for further increases in taxes. The future outlook for retailers remains uncertain, but one thing is clear: businesses will continue to face significant challenges in the coming months. As Murphy said, "enough is enough" when it comes to business taxes – a sentiment likely to be echoed by many in the industry. Key numbers: Tesco's upgraded profit forecast: up to £3.1 billion ERP levies set aside by Tesco: £90 million Expected cost of ERP programme to UK producers: £1.1 billion Rise in Tesco shares since start of year: 2% FTSE 100 index performance since start of year: -5% *Financial data compiled from Bbc reporting.*