Business Rates Rise Could Put Over 100 Supermarkets at Risk

More than 100 of the UK’s largest supermarkets could be pushed into unprofitability under government plans to raise business rates on high-value retail properties, industry sources have warned.

The proposed changes, expected to be announced in the autumn Budget, would apply to properties with a rateable value above £500,000—a threshold affecting the top 1% of stores nationwide. Revenue generated would be used to fund permanent tax relief for smaller retail, hospitality, and leisure businesses.

Major Chains Facing Impact

According to analysis reported by the Financial Times, the potential impact on leading supermarket groups could be significant:

• Sainsbury’s: Around 50 of its 600 stores could become unprofitable

• Tesco: “Tens” of stores could be affected

• Morrisons: Approximately 30 outlets at risk

• Asda: Around 90% of its 600-store estate could be hit by higher charges

By contrast, discount retailers such as Aldi and Lidl are expected to be far less exposed. Colliers’ analysis suggests fewer than 10% of Lidl stores would be impacted, while Aldi’s smaller store formats largely fall below the proposed threshold.

Concerns Over Knock-On Effects

The British Retail Consortium (BRC), representing over 200 major retailers, has warned that the changes could lead to higher food prices and disrupt local economies, particularly in the run-up to the crucial Christmas trading period. Larger supermarkets often serve as anchor tenants, attracting footfall to surrounding businesses.

The Treasury argues that the reform would help “level the playing field” by supporting smaller operators that have struggled in recent years. However, critics caution that the loss or downsizing of large stores could ultimately harm the high street ecosystem.

Industry Outlook

If implemented, the measure could accelerate store closures and reshape the retail landscape, with potential consequences for supply chains, employment, and food affordability. Retailers are expected to lobby intensively ahead of the Budget to mitigate the impact.