As the cost of living crisis continues to squeeze UK households, the nation’s supermarket sector is once again in the spotlight—this time, with a stark warning from one of its biggest players. On September 15, 2025, Giles Hurley, chief executive of Aldi UK, sounded the alarm that any new measures in the upcoming Budget that increase costs for employers could directly result in higher food prices for shoppers. Speaking to the BBC, Hurley didn’t mince words: “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.”
This isn’t just theoretical hand-wringing. Hurley pointed to the very real impact of last year’s National Insurance rise and the introduction of new packaging rules—both of which, he said, have already “rippled through to prices on the shelf edge” across all supermarkets. “If you speak to customers across the country, they’ll tell you that inflation is persistent and urgent,” he added. “Action is needed.”
His comments come at a tense moment for the industry. More than 60 retailers, Aldi included, wrote to Chancellor Rachel Reeves in August, urging her to avoid further taxes on an industry already battered by government revenue-raising measures. The message was clear: retailers fear that any additional financial burdens will ultimately fall on the consumer in the form of pricier groceries.
Despite these headwinds, Aldi reported that its annual sales edged up to a robust £18.1bn. But there’s a twist: profits dropped by more than 20%, landing at £435.5m. According to Aldi, this drop is largely down to heavy investment in price cuts, infrastructure, and higher pay. The company has not disclosed exactly how much recent tax changes have cost it this year, but Hurley revealed that more than £300 million has already been spent in 2025 to offset the rising cost of goods and keep prices as low as possible for shoppers.
Yet, for many families, that relief has been hard to spot. Take a 500g pack of lean beef mince, a staple in many British kitchens. Retail expert Ged Futter told the BBC that the price jumped from £3.79 at the start of 2025 to over £5 at all major supermarkets. Hurley explained, “Cattle prices are up 30% this year and herd sizes are dropping and that is playing into the price of mince.” The cost of living, it seems, is being pushed up by both global and domestic forces.
On the global front, rising commodity prices have played a major role in food inflation everywhere. But Hurley believes that some UK policy decisions have “perhaps inadvertently” created a more stubborn inflation situation at home—“probably more so than in other developed countries.” The numbers back him up: UK food inflation hit 4.9% in July, according to Eurostat, compared to 3.9% in the EU.
The Bank of England has weighed in as well, warning that a new packaging waste levy on retailers could push food prices even higher this autumn. The Food and Drink Federation (FDF) echoed these concerns in its latest outlook, projecting that UK food inflation could reach 5.7% by the end of December and remain at 3.1% by the close of 2026. The FDF identified the rise in the minimum wage and higher National Insurance Contributions as primary drivers of food inflation, with the new packaging rules alone expected to add a whopping £1.1bn in costs for food and drink businesses starting in October.
With all these pressures mounting, Aldi has doubled down on its value proposition. On September 14, just a day before Hurley’s warning, the retailer announced price cuts on over 900 products—despite rising food costs. Julie Ashfield, Chief Commercial Officer at Aldi UK, explained, “Rising inflation has meant many shoppers are understandably more conscious about where they spend their money. That’s why we’ve already invested more than £300 million in price cuts this year, ensuring Aldi customers continue to benefit from the very best value.”
The price reductions span a wide range of everyday essentials: Specially Selected 10-pack Pork Sausages dropped from £3.79 to £3.49, Specially Selected flavoured Smoked Salmon fell from £3.29 to £2.89, and Tuna chunks in Springwater are now 65p, down from 72p. Even the popular Strawberry/Vanilla Granola top Protein Pot saw a significant cut, from £1.39 to 99p. Aldi’s “Super Six” deals have also slashed prices on fresh produce staples—carrots, swede, savoy cabbage, sweetcorn, red onions, and cauliflower—all now available for well under £1.
“We know how important the lowest prices are to our customers, especially as they prepare for Christmas, and we continue to offer significant savings compared to the full-price supermarkets,” Ashfield noted. The retailer recently regained its title as the UK’s lowest-priced supermarket from Lidl, according to the latest Which? analysis.
But Aldi is not resting on its laurels. The company is in the midst of an ambitious expansion, opening an average of one new store each week between now and the end of the year. Locations range from Sefton in Liverpool and Pacific Drive in Eastbourne to Brimington in Chesterfield and Shoreditch in London. In total, Aldi now operates 1,060 stores and plans to add another 80 shops over the next two years, backed by a £1.6bn investment.
Hurley believes that supporting farmers is crucial to keeping food prices in check. “More certainty and support for farmers” is necessary, he said, to boost the amount of food produced in the UK—a move that could have a “really positive impact” on inflation. “Ultimately, a resilient British food sector is utterly dependent on having a resilient British farm sector,” he emphasized.
Of course, supermarkets themselves have a role to play. Hurley acknowledged that while global commodity prices and domestic policy are significant factors, retailers must continue to find ways to deliver value to customers. This means investing in price cuts and infrastructure, even at the expense of short-term profits.
The government, for its part, has signaled that it is listening—at least to some degree. In a statement, a Treasury spokesperson said, “The chancellor has announced that the forthcoming Budget will build an economy that works for working people. That includes bringing down inflation, keeping a tight grip on public spending and tackling the cost of living.” The Budget is set to be announced on November 26, 2025, and all eyes in the retail and food sectors will be watching closely.
For now, Aldi’s efforts to shield shoppers from the worst of food inflation stand as both a warning and a promise: the battle over food prices is far from over, and the choices made in Westminster this autumn could shape the fate of British dinner tables for years to come.
