Supermarkets are under mounting pressure to pay back £3 billion in business rates after a leading retail entrepreneur questioned why their bills had been waived while customers queued “around the block” to shop.
Julian Richer, chief executive of Richer Sounds, the television and hi-fi seller, said he was “really annoyed” that grocers had benefited from an industry-wide holiday as Covid-19 paralysed much of the retail sector.
The pandemic shut down high streets and shopping centres across Britain in the spring. Non-essential retailers such as Richer Sounds are preparing to close in England again tonight after the government ordered a second lockdown.
English retailers have been granted a 100 per cent discount on their business rates for this financial year, a step that Rishi Sunak said would provide “vital cash” to struggling high street shops and would help to ensure their survival.
However, Mr Richer, 61, criticised the way in which this universal relief for retailers covered grocers that had enjoyed surging sales this year.
“Now I get it for shops that are closed. The supermarkets have got customers queuing around the block. Why have they had a rates holiday? Hundreds of millions of pounds a year. Maybe they should refund their rates bill.”
Tesco, which accepted a £585 million business rates holiday, and Wm Morrison paid dividends recently. J Sainsbury is expected to follow suit tomorrow.
This week Howdens, a supplier of fitted kitchens and joinery products that closed all its depots in March, pledged to repay £22 million of furlough cash and £8 million of emergency business rates discounts after its subsequent trading beat expectations.
Other companies are demanding more assistance as they brace for restrictions that they warn will have “harsh and lasting consequences” on their operations.
Chains including River Island, Dixons Carphone and JD Sports have called on Boris Johnson to extend rates relief for a further two years “as a matter of utmost urgency”.
The CBI, which counts Tesco, Sainsbury’s and Asda among its members, has repeatedly urged firms to “take only what you need”.
Josh Hardie, its deputy director-general, said: “It’s very difficult to make these decisions. It’s up to individual firms. I wouldn’t try and put any blanket rule on it. But those firms who are able to sit back and say, ‘Well, maybe we didn’t need that money or maybe we didn’t use that money’, [then] actually that comes back to the state.
Tesco said that it had incurred substantial costs to deal with Covid-19. Morrison’s, Sainsbury’s and Asda did not respond to requests for comment.