Ocado blasts web tax as sales surge
OCADO’S boss has hit out at calls for an online sales tax, claiming it would penalise businesses for being efficient – after his company’s sales surged by a third last year.
Multi-millionaire Tim Steiner made his remarks at the retailer’s annual results yesterday, which showed its full year sales rocketed to more than £2.3billion due to the pandemic.
Profits in its main online supermarket arm, which is now a joint venture with Marks & Spencer, soared by 265 per cent to £148million.
Ocado, which is valued at £20billion, has been one of the big winners of lockdown as more people turn to online grocery orders. With sales at online businesses booming because of the Covid crisis, there is speculation the Treasury is drawing up plans to tax them more. CEO Tim said: “We already have a sales tax in the UK, it’s called VAT. We didn’t have different rates of VAT as people moved from the high street to out-of-town superstores or shopping centres that were cheaper to operate in.
“I don’t think it is appropriate to put a sales tax on a retailer if they are more efficient.” Ocado, which paid £18.4million corporation tax last year but nothing in 2019, would have to pay £22million if there were a one per cent tax on its retail sales.
Although its UK grocery sales are booming, Ocado as a whole made a £44million loss last year because of heavy investment in its “solutions business”, which sells and builds robot warehouses for supermarkets.
It has deals in the US, Australia and Europe and is looking to capture more of the £7.6trillion global grocery market.
Ocado’s sales increase during the pandemic has been mirrored at other retailers, including Tesco, Morrisons and Sainsbury’s.
According to data from Nielsen, online sales now account for a record 16 per cent of the total grocery market.