Tesco to return £ 585m support

TESCO has said it will return to the Government £ 585million it saved from a business rates holiday introduced to help struggling retailers.

Chairman John Allan said the board is “conscious of our responsibilities to society” and that the company did not need the saving because its supermarkets remained open and trading strongly throughout the pandemic.

The decision comes as supermarkets face growing calls to hand back the savings which were aimed at helping retailers that were unable to open.

The four largest grocers – Tesco, Sainsbury’s, Asda and Morrisons – and German rivals Aldi and Lidl are projected to save around £ 1.87billion as a result of the rates holiday, according to data compiled last month by real estate advisers Altus Group.

This was set to represent more than a sixth of the total £ 10.1billion rates bill which has been written off for all businesses during the year. Bosses at Tesco said they will work with the Government on how best to hand over the money.

Mr Allan said: “The board has agreed unanimously that we should repay the rates relief we have received. We are financially strong enough to be able to return this to the public and we are conscious of our responsibilities to society.

“We firmly believe now that this is the right thing to do and we hope this will enable additional support to those businesses and communities who need it.”

In October, Tesco revealed it made a pre- tax profit of £ 551million in the six months to August 29 – an almost 29 per cent increase compared with the same period in 2019. Sales during that period were up 0.7 per cent to £ 28.7billion, with sales in the UK and Ireland up more than 8 per cent.

Chief executive Ken Murphy said: “While business rates relief was a critical support at a time of significant uncertainty, some of the potential risks we faced are now behind us.

“Every decision we’ve taken through the crisis has been guided by our values and a commitment to playing our part.”

Tesco closed 4.4p lower at 224.5p amid concerns that the move would diminish its profits for the year.

‘ Some of the potential risks we faced are now behind us’