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Large retailers are warning the government: raise our taxes, and we’ll raise your prices.

But test the claim and it looks less like economic inevitability and more like corporate opportunism.

The alarm comes from the British Retail Consortium (BRC), reporting that two-thirds of finance directors expect prices to rise in the next year. They point to costs added in Labour’s first Budget: higher National Insurance contributions and the new National Living Wage.

And with Chancellor Rachel Reeves reportedly considering more tax measures in the autumn, big retailers are already laying down markers.

But one name stands out: Tesco.

Britain’s dominant supermarket chain posted nearly £2.3 billion in pre-tax profits last year.

It holds enormous market power and uses its Clubcard reward system to manipulate perceived discounts — a practice that some economists argue quietly inflates base prices for those without the card.

Yet it’s still among the loudest voices suggesting prices may have to rise if Labour adds more pressure.

The hypocrisy is glaring.

Tesco’s new CEO, Matthew Barnes, may not have been long in the job, but his predecessor — Ken Murphy — came with a track record from Boots where staff cuts were extreme, and profit-chasing was central.

Under his leadership, Boots slashed staffing to the point where some stores reportedly operated with just one worker.

During that period, the company recorded profits of £388 million in 2017 and £317 million in 2018, but still made severe cuts.

In Tesco, that philosophy may persist. Despite immense profits, the company looks set to use Reeves’ planned tax hikes as a reason to squeeze more from customers.

That looks less like necessity and more like bandwagon-jumping: linking inflationary moves to political headlines in order to justify price hikes that boost profit margins.

Not all retailers are playing the same game. Chains like Poundland and Iceland have been closing stores and may be genuinely under pressure.

According to the BRC, 42 per cent of surveyed retailers have frozen recruitment, and 38 per cent have cut staff.

For some, rising wage and tax costs might truly threaten survival.

This is where the opportunity lies.

Labour could, and should, take this moment to assert leadership.

Reeves could announce that a portion of any new tax revenue will be earmarked to support struggling retailers — but only those who:

• Show transparent pricing and fair margin policies
• Are not posting major profits
• Protect their workforce from excessive cuts

Such a scheme could include targeted relief, business rate rebates, or support for small and medium retailers investing in staff, green logistics, or digital upgrades.

Crucially, it would allow Labour to draw a line: those who exploit crises for profit will pay; those trying to survive and serve local communities will get support.

This two-tier approach doesn’t just make economic sense; it makes political sense.

Labour could say to the public: “We’re taxing windfalls to defend the shops and jobs you rely on.”

Retailers are making threats. The government can respond with action that supports the economy from the bottom up — not the boardroom down.

And if giants like Tesco decide to hike prices anyway, Labour would be armed with a response: show us your books, justify your margins, and explain why your customers should keep footing the bill.

This isn’t just about taxation.

It’s about choosing who shapes the economy: opportunists in corporate HQs — or a government that backs the people who pay the bills.

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