Dave Lewis Image: Tesco PLC

Tesco chief executive Dave Lewis has warned of the "lethal cocktail" facing the retail industry amid falling profits.

Speaking at the CBI Annual Conference, Mr Lewis said the sector is facing £14 billion worth of extra costs over the next five years.

He highlighted the "unintended consequences" of the new national living wage, which comes into effect in April, and explained that Tesco's own business rates bill has risen 35% in the past five years.

"Profits are down but business rates are up," he said.

"It is the biggest tax we have and is three times the OECD average."

He added: "For every £1 we pay in corporation tax large UK retailers pay £2.31 in rates. It is unsustainable."

Paying its lowest paid staff outside London around £8.80 per hour (including benefits), Tesco said it already pays "significantly above the new voluntary living wage rate". Mr Lewis described raising basic pay at the expense of other benefits as "not the answer".