Nine out of 10 top local retailers contacted by RN this week backed their businesses to thrive even if a sugar tax is introduced.

While industry-backed think tank analysis predicts small shops will be the hardest hit, local retailers think loyal customers and a switch to healthier products will keep sales strong.

A report by Oxford Economics last week stated the levy would lead to a £132m decline in economic output, while a coalition – including retailer associations, soft drinks manufacturers and wholesalers – formed to lobby against the levy.

However, Premier retailer Steve Archer is one of several retailers who, like Adam Hogwood, of Budgens of Broadstairs, and Chaz Chahal, of Costcutter Bromsgrove, feels the tax won’t have an effect on shopping habits.

“Even if there’s an 18%-20% price rise I think people will stand that increase,” Mr Archer told Retail Newsagent. “Even with all the tobacco regulations and price rises I haven’t noticed a drop in sales, and it will be the same with the sugar tax.”

Other retailers, however, said any drop in sales of fizzy drinks will be more than offset by the growth in popularity of non-sugary alternatives. They acknowledge, though, that when the precise details of the policy are thrashed out this could change.

“I now sell 12 cases of water a week. Five years ago that figure would have been four, so I am not worried about the tax,” Jon Powell, of The Newsagent in Newport, said.

Susan Connolly, owner of four Spar stores in Wiltshire, added: “We’ve seen a change already in our customers’ habits. So I don’t think customer spend will go down. Rather, it will spread across healthier products.”

Spar retailer Julian Taylor-Green said he was surprised by the findings, arguing the whole policy is “shrouded in mystery” and the tax was simply an underhand way of raising revenue.