Sainsbury’s and Aldi have followed Tesco and handed back over £500 million in taxpayer support after a storm of protest over supermarkets enjoying record sales during Covid while taking business rates holidays.
After Tesco and Morrison’s announced moves to repay their business rates last night, the total given back now comes to £1.4 billion.
Pressure moved to Lidl, Co-op and Asda to follow suit, as well as the likes of homewares chain B&M, which also profited from being allowed to stay open throughout the pandemic.
Sainsbury’s will return £440 million, while Aldi, Britain’s fifth-largest supermarket, said more than £100 million will be paid back to the Government and the UK’s devolved administrations.
The business rates holiday, aimed at helping firms ride out the virus crisis, is due to finish at the end of March 2021.
Grocers have faced severe criticism for taking it while seeing high customer demand during the pandemic and paying out dividends to shareholders.
Sainsbury’s is paying out £231 million to investors via two separate dividends relating to this year and last.
Last month the chain’s boss Simon Roberts defended the payout. He argued that pensioners rely on the dividend and said the company has long campaigned on business rates reform because the system unfairly penalises bricks and mortar retailers.
Today Roberts said the firm still wants the Government to review the rates system, but sales and profits have been better than expected since the start of the second lockdown.
The Sainsbury’s chief executive added: “While we have incurred significant costs in keeping colleagues and customers safe, food and other essential retailers have benefited from being able to open throughout.
“With regional restrictions likely to remain in place for some time, we believe it is now fair and right to forgo the business rates relief that we have been given on all Sainsbury’s stores.”
Aldi UK’s boss Giles Hurley, said the firm believes its move “is the right decision to help support the nation”.
A spokesman for the CBI said: “Now, with light at the end of the tunnel in the form of an approved vaccine, it is right that companies are reassessing the levels of support they need.”
Sainsbury’s is forgoing £410 million of rare relief for the year to March 2021, and £30 million for the following year.