Aldi Warns Food Prices May Rise if Budget Lifts Costs
LONDON - The boss of discount supermarket chain Aldi has warned that any measures in the upcoming UK Budget to further increase costs on employers could lead to higher food prices, adding to the pressure on households already struggling with inflation.
Aldi UK chief executive Giles Hurley told the BBC that the impact of last year's National Insurance rise and new packaging rules had already "rippled through to prices on the shelf edge," implying that any additional costs would be passed on to consumers. "Any policies which affect the operating costs of business should be considered very, very carefully because of the very real risk they find their way... back into the food system and onto prices," Mr. Hurley said.
The warning comes as over 60 retailers, including major chains such as Tesco and Sainsbury's, wrote to Chancellor Rachel Reeves last month urging her to avoid further taxes on the industry, which has been hit hard by government revenue-raising measures. The British Retail Consortium, the trade body representing the sector, has also warned that planned reforms to business rates could lead to increased costs for retailers.
The UK is not alone in grappling with rising food prices and increasing costs for businesses. Inflation is a global concern, with many countries struggling to balance economic growth with price stability. In the United States, for example, the Federal Reserve has raised interest rates to combat inflation, while in Europe, governments are implementing measures to support households and businesses affected by high energy prices.
The UK Budget, scheduled for November 26, is expected to focus on cutting inflation and keeping a tight grip on public spending. However, retailers are urging the government to consider the potential impact of any new policies on business costs and, ultimately, food prices. "We understand that the government needs to balance its books," said Mr. Hurley, "but we hope they will take into account the very real risks to consumers if businesses are forced to absorb further costs."
As households continue to feel the pinch from rising living costs, retailers and policymakers alike are under pressure to find solutions that support economic growth without exacerbating inflation. The outcome of the Budget will be closely watched by industry leaders and consumers alike.
Background:
The UK's National Insurance rise last year was part of a broader package of measures aimed at increasing government revenue. However, the impact on businesses has been significant, with many warning that further increases could lead to job losses and reduced investment.
Additional Perspectives:
Industry experts say that retailers are facing unprecedented challenges in maintaining profit margins while absorbing rising costs. "The pressure on retailers is immense," said one analyst. "Any additional costs will be passed on to consumers, who are already struggling with high prices."
Current Status and Next Developments:
The UK Budget is scheduled for November 26. Retailers and industry leaders are urging the government to consider the potential impact of any new policies on business costs and food prices. The outcome of the Budget will be closely watched by industry leaders and consumers alike.
Attributions:
Aldi UK chief executive Giles Hurley
Chancellor Rachel Reeves
British Retail Consortium
Industry analysts
*Reporting by Bbc.*
