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Summary
- Tesco will be repaying £585 million of business rates relief that was provided in the early days of the Covid-19 pandemic
- The supermarkets have been accused of taking the business rate relief despite enjoying the increased sales
- Tesco has seen surge in profits during the pandemic and has also paid £315 million to its shareholders
Tesco PLC (LON: TSCO), the largest supermarket chain of the UK has announced its decision to repay business rates relief of £585 million to the government. The retailers, hospitality firms and leisure businesses had received financial support from the UK Treasury during the early days of the coronavirus pandemic.
The retailer said that it was extremely grateful for the financial and policy support that was provided to them by the British Government. It was like a game-changer, allowing them to ensure the availability of all the essential items that were required by the customers.
Major safety concerns, panic buying, risk of mass absences from work, and severe pressure on supply system had led to significant uncertainty earlier this year, said the supermarket chain. However, the business has been resilient, facing the most challenging times. Even though the crisis has hampered the operations, the company remains committed to doing the right thing for the customers as well as the shareholders.
The supermarkets have been criticised for taking government, help as they had enjoyed increased sale during the crisis and have even paid the dividend to their shareholders.
Interesting Read: Tesco (LON:TSCO) defends paying dividend to its shareholders
However, Tesco justified that every penny of the rates relief provided to them had been spent on managing the crisis situation. It was reported in the first half results of the company that the pandemic’s cost for the full year would sum up to approximately £725 million, which was well in excess of the £585 million rates relief that was received by the company. But the management deliberated the issue reached to a conclusion of repaying the business rate relief.
After Tesco announced that it would repay the business rates relief, the brewing industry of the UK has requested the government to redistribute £585 million of repaid by Tesco to the struggling hospitality industry.
The Society of Independent Brewers, popularly known as SIBA has pointed out that 40,000 pubs and 2,000 breweries of the UK could receive £14,000 each, which would prove beneficial for the businesses in Tier 2 and 3 in offsetting some of the sales that they would be losing over the Christmas period due to the tighter tier system.
The Chief Executive of SIBA, James Calder, said that the supermarkets have revived, but the UK’s pubs and brewers are struggling to survive.
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