Tesco, Sainsbury's, Morrisons pay back £1bn+ in business rates relief,
Supermarkets giant Tesco said on Wednesday that it’s repaying the £585 million worth of business rates relief it received from the UK government and devolved administrations as part of the retailer support offered during lockdowns this year.
Retailers such as Tesco have come under a huge amount of pressure for having accepted the money, given that they were allowed to continue trading during all of the lockdowns and during other restrictions that have been in place.
They were classified as essential retailers, but because of the way their stores are designed, most of them were able to continue selling non-essential items such as fashion and beauty while other fashion and beauty shops were forced to close.
Tesco said it was “immensely grateful for the financial and policy support provided to us by the governments of the UK. This was a game-changer and allowed us to ensure customers got access to the essentials they needed”.
And to counter the criticism, it said that “the decision at the time to provide rates relief to all retailers was hugely important. These funds meant that we had the immediate confidence, in the face of significant uncertainty, to invest in colleagues, and support our customers and suppliers”.
It also added that “every penny of the rates relief we have received has been spent on our response to the pandemic. Our latest estimate at our Interim Results in October was that Covid would cost Tesco [around] £725 million this year — well in excess of the £585 million rates relief received”.
But while it has clearly had to invest in its business above and beyond the subsidy it received, the fact that it was able to pay a shareholder dividend this year and the fact that so many other businesses have suffered more or have even been unable to continue, has clearly put pressure on Tesco and the other supermarkets.
Tesco said it remains “absolutely committed to doing the right thing by our customers, colleagues and all our stakeholders”.
After Tesco announced its plan, rivals Sainsbury's and Morrisons, which also sell fashion and beauty, said they would pay back £714 million between them.
Copyright © 2023 FashionNetwork.com All rights reserved.