The chief executives of Tesco and Sainsbury’s say the proposed increase to business rates for larger stores could damage the UK’s town centres.

According to a report by The Telegraph, the two retail giants warned that a business rates hike will add pressure to High Street retailers, which may lead to increased prices and a slowdown in hiring to offset costs.

Ken Murphy, CEO of Tesco, said: “Increasing the burden on large shops would hinder rather than help our town centres, and many of these shops are anchor stores in their local communities. The reforms as proposed do not meet the original intention to rebalance the burden of business rates to be fairer and support town centres.”

He added that the plans would negatively impact “investments in customers, colleagues and communities”.

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Sainsbury’s CEO, Simon Roberts, said the increased business rates could cause supermarket retailers to “pull away from our high streets”.

“The changes being proposed will further increase the negative impact of business rates and won’t stimulate the growth or investment into our high streets and jobs that we all want to see.

“The Government promised fundamental reform to level the playing field, but the changes we are hearing about will not deliver this, they will not stimulate growth or investment, and they will force businesses to pull away from our high streets and think twice before investing,” he added. 

The criticism follows an M&S warning last week, of potential store closures, if the business rate increase plan is introduced.

Retailers have cited the rise of national insurance contributions and increased minimum wage as the reasons for inflation.

In June, food and drink inflation in the UK reached 4.5% and was the third consecutive month of increase.