Join Hafta-Ichi to Research the article “Sainsbury’s hands back £440m in Covid business rates relief | Business”
Sainsbury’s has become the third major supermarket chain in the UK to announce that it will repay most of the business rates relief it accepted from the government during the Covid-19 pandemic.
The company said it would repay £440m of the £490m it was eligible for after the chancellor announced in March a 12-month business rates holiday. This means that nearly £1.3bn is being repaid by three of Britain’s biggest supermarkets, after Tesco was the first to announce the decision on Wednesday, closely followed by Morrisons.
While other retailers and hospitality firms have struggled with lockdown closures and other coronavirus restrictions, supermarkets have stayed open throughout and enjoyed a surge in sales during the pandemic, albeit with higher costs.
Sainsbury’s said it would keep the remaining £50m of financial support it received for its Argos stores that were forced to close during the lockdowns.
The latest announcement comes after Tesco said on Wednesday it would hand back the financial support to the government and repay £585m . Tesco was closely followed by Morrisons, which is set to repay £274m.
Supermarkets have been under pressure to repay the government, after grocery sales were boosted during the pandemic while other non-essential retailers were forced to close and businesses in other hard-hit sectors, such as entertainment and hospitality, were pushed to the brink. Supermarkets also caused controversy by paying big dividends to shareholders. Sainsbury’s defended its decision last month to pay £230m in dividends while Tesco is paying out £315m.
Simon Roberts, the Sainsbury’s chief executive, said: “While we have incurred significant costs in keeping colleagues and customers safe, food and other essential retailers have benefited from being able to open throughout.
“With regional restrictions likely to remain in place for some time, we believe it is now fair and right to forgo the business rates relief that we have been given on all Sainsbury’s stores. We are very mindful that non-essential retailers and many other businesses have been forced to close again in the second lockdown and we hope that this goes some way towards helping them.”
Sainsbury’s sales and profits have been stronger than expected, particularly since the start of the second lockdown in England in November.
Including business rates payments, the firm now expects to make an underlying profit before tax of at least £270m for the year to March 2021, rising to more than £586m the following year. This compares with a £586m profit in the year to March 2020.
In total, the big six supermarkets – Tesco, Sainsbury’s, Asda, Morrisons, Aldi and Lidl – were in line for £1.9bn in relief payments during the current tax year, according to figures from Altus Group, a property adviser. Including convenience stores and food warehouses, the food sector was in line for £3.03bn, Altus estimates.
Sainsbury’s said it had hired 56,000 people, paid 13,000 staff to self-isolate and made nearly 9m grocery deliveries to elderly, disabled and vulnerable customers during the pandemic. It has not taken any furlough payments or other financial support from the government.
Source: The Guardian
Keyword: Sainsbury’s hands back £440m in Covid business rates relief | Business