The boss of Aldi has warned Rachel Reeves not to hike supermarket's costs at her upcoming Budget, as sales topped £18billion in the UK and Ireland last year.

The discounter became the latest in a chorus of businesses raising concerns about the impact of potential tax hikes on food prices.

Giles Hurley, chief executive of Aldi UK, said: '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.'

Recent increases including the hike in employer National Insurance contributions and a new packaging levy have already 'rippled through to prices on the shelf edge,' he added to the BBC.

And shoppers are still 'finding things difficult' he explained, as more Brits flocked to the German retailer this year.

The retailer said it made £18.1billion in sales last year, compared to £17.9billion in 2023.

But it said profits were hit by a fierce price war between rivals including fellow discounter Lidl and traditional heavyweights Tesco and Sainsbury's.

Profits fell from £552.9million to £435.5million as the business invested in prices, infrastructure and boosting staff wages.

Its market share has grown to 10.8 per cent, according to figures from data firm Worldpanel last month.

Hurley said: 'Shoppers are still finding things difficult and that's why we're staying laser focused on doing what Aldi does best - offering customers great quality products at unbeatable prices.

'Nobody else is making the same commitment to everyday low prices – no clubs, no gimmicks, no tricks - just prices our customers can trust and quality they can depend on.'

His comments came as trade group the Food and Drink Federation (FDF) warned that food inflation could hit 5.7 per cent by the end of December. It was 4.2 per cent in August, according to the British Retail Consortium.