The chairman of Asda has told Chancellor Rachel Reeves to ‘stop taxing everything’ ahead of the upcoming budget.
Allan Leighton has warned that the government needs to change the way it thinks about growth in order to avoid a stagnating economy.
He said instead of ‘taxing everything in some way, shape or form’ the government should start investing in Britain.
It comes as Rachel Reeves must find £50 billion in tax rises or spending cuts to balance the books, the National Institute of Economic and Social Research (NIESR) said.
The Chancellor has vowed to stick to her pledge to not raise income tax, national insurance or VAT – and will also keep her fiscal rules preventing more borrowing.
She is considering extending a freeze on income tax thresholds, introducing a ‘mansion tax’ on the sale of expensive home and plotting a raid on the gambling industry, The Telegraph reported.
She is also said to be considering hikinh business rates for larger units, which could lead to bigger bills for supermarkets.
Mr Leighton said the changes would be ‘very unhelpful’
He added: ‘All these things don’t make life easier. They are contributing to inflation, and inflation is hitting the pocket of the consumer.’
Asda was named this week as the worst performing major supermarket over the three months to August 10.
Sales fell 2.6 per cent to £4.22billion over the period, making it the only grocer to see sales plunge, apart from the Co-op which saw a 3.2 per cent drop.
Its market share has fallen from 12.7 per cent to 11.8 per cent in the past year, market researcher Worldpanel said.
Figures from the supermarket itself also revealed the disposable income of middle-class families had fallen for the first time in two years.
Asda has put pressure on its suppliers to cut their own prices in recent months, in an attempt to win back customers.
Mr Leighton said: We try to do the right thing for the customer and if the suppliers want to come with us, and a lot of them do, then we take that support.
‘But if we think it’s the right thing to do for the customer, we’re going to do it anyway.’
Mr Leighton called on the government to ‘invest in Britain’ in order to achieve economic growth.
He told CityAM: ‘Growth isn’t driven by government. Growth is driven by organizations and companies and people. And if they can’t invest, then we will not grow, no matter what the government says or does.’
Earlier this year he admitted the supermarket chain is ‘struggling’ and has warned profits will fall further amid an investment to improve stores.
Mr Leighton, who stepped into the role of chairman in November, said it was ‘quite obvious’ that changes needed to be made to improve efficiency.
‘It’s pretty difficult to say the business isn’t struggling when its sales are down five per cent,’ he said.
There are some signs of recovery, even though sales were down 0.2 per cent in the three months to the end of June, it was the supermarket’s best quarterly performance since the start of 2024.
But Asda warned that sales could still take a hit as it races to complete its long-awaited IT upgrade