Sainsbury’s boss calls for rates overhaul to ‘ level playing field’

SAInSBuRy’S lashed out at unfair business rates as it revealed a dramatic slowdown in its sales growth.

Bosses said an overhaul of rates and taxes was needed to ‘level the playing field’ between traditional retailers and their online rivals.

Sales at the uK’s second largest supermarket rose by a mere 0.2 per cent in the three months to June 30 – compared with growth of 2.3 per cent in the same period last year.

It comes amid a backlash among retailers against crippling business rates, which are being blamed for a slowdown on the high street, with thousands of stores closed and jobs lost in the last few years.

Kevin O’Byrne, Sainsbury’s chief financial officer, called for an overhaul that would see online giants such as Amazon pay their fair share. ‘We’ve been very clear there needs to be a change,’ he said. ‘It is a very serious issue, it’s really not a level playing field in business rates or taxation more generally between online players and tradithat

‘There needs to be a change’

tional retailers. It’s a big number and we think that needs to be looked at in the context of total business taxation because we’re seeing the impact of it across the High Street.’ The Mail revealed this week Amazon pays just £14million a year in business rates for its 13 enormous warehouses – far below the costs faced by high street stores.

Sainsbury’s forks out around £560million in business rates each year. It is the 70th largest company on the FTSE 100 index but is about the seventh largest taxpayer, it said. Around 60 per cent of its tax bill is made up of business rates.

Mr O’Byrne’s comments came as analysts raised concerns that Sainsbury’s was kicking off its £14billion merger with Asda from a ‘weak starting point’. According to the most recent data from Kantar Worldpanel, Sainsbury’s has seen the weakest trading among Britain’s big four grocers.

The deal is currently being investigated by the Competition and Markets Authority, with the probe unlikely to be completed until the end of next year.

neil Wilson, an analyst at trading platform Markets, said: ‘Sainsbury’s trading update shows a pretty lacklustre performance... with further evidence it is continuing to cede ground to rivals. It suggests stagnant sales in core grocery... and further suggests that the merger with Asda is being embarked upon from a pretty weak starting point.’