Asda becomes latest supermarket to hand back business rates relief
Asda has become the latest major retailer to commit to handing hundreds of millions of pounds in business rates relief back to the Government.
The supermarket said it would return more than £340 million it saved from the rates holiday earlier this year, following similar moves by Tesco, Sainsbury’s, Morrisons and Aldi.
Discount retailer B&M also told investors on Thursday afternoon it will return its savings of “around £80 million”.
It means retailers have now pledged to pay back almost £2 billion to the Government, piling pressure on their competitors — including Marks & Spencer, Waitrose, the Co-Op and Lidl — to follow suit.
Asda president and chief executive officer Roger Burnley said: “Throughout the pandemic we have always sought to do the right thing – fulfilling our role in feeding the nation, protecting our colleagues and supporting our communities.
“But, as the hope of a vaccine and a more ‘normal’ life returning in 2021 grows, we have confidence that we are in a strong position to again do the right thing for the communities we serve.
“Almost half our customers are telling us they expect their financial position to worsen in the next 12 months and we recognise that there are other industries and businesses for whom the effects of Covid-19 will be much more long lasting and whose survival is essential to thousands of jobs.”
Sainsbury’s said it will hand over £440 million saved from the Government’s business rates holiday.
Discount retailer Aldi announced it plans to give back its tax break of more than £100 million.
Tesco has announced it will hand back £585 million and Morrisons £274 million.
Downing Street welcomed the retailers’ decisions to hand back the cash.
The business rates holiday was announced in March by Chancellor Rishi Sunak, aimed at helping retailers and hospitality firms forced to close due to the pandemic.
Asked on Wednesday if it would match the Tesco pledge, the Co-op said the amount spent on protecting staff and customers outweighed the savings.
It added: “Given the huge uncertainty we’re facing … and the ongoing costs we are incurring, we’ll consider our approach in terms of the Government support we’ve received at year end.”
A spokesman for Waitrose owner the John Lewis Partnership said: “We are incredibly grateful for this vital support because we have lost significant sales while our John Lewis shops have been closed and have invested heavily to keep our partners and customers safe.
“The outlook remains incredibly uncertain and Government support remains crucial to help us navigate the crisis.”
Marks & Spencer has said it does not intend to return its £83 million of business rates relief.
“We are very grateful for the much-needed support Government has provided to businesses impacted by the pandemic – including ours,” a spokeswoman said.
“It has enabled us to support our colleagues and our suppliers, whilst continuing to serve our customers in what have been incredibly challenging circumstances.”
Data compiled last month for the PA news agency by real estate adviser Altus Group projected the UK’s four largest grocers – Tesco, Sainsbury’s, Asda and Morrisons, plus German rivals Aldi and Lidl – would save about £1.87 billion as a result of the rates holiday.
The total saving for all “essential” retailers, which have been allowed to remain open, is about £3.03 billion, Altus added, from a total rates bill of £10.1 billion.
Reporting by PA
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