Aldi to give back more than £100m in coronavirus cash

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Aldi, the UK’s fifth-largest supermarket, will return the full value of the business rates relief it has received during the pandemic. Over £100m will be paid back to the UK Government and the Devolved Administrations.

Giles Hurley, Chief Executive Officer at Aldi UK, said: “Thanks to our amazing colleagues, we have been able to remain open during lockdowns and despite the increased costs we have incurred during the pandemic, we believe returning the full value of our business rates relief is the right decision to help support the nation. Our continued investment for our colleagues and our customers will remain unchanged.”

Sainsbury’s will hand back around £440 million saved from the Government’s business rates holiday a day after Tesco said it would hand over £585 million and £274 million by Morrisons.

Tesco chairman John Allan said the board “are conscious of our responsibilities to society” and that the company did not need the £585 million saving due to remaining open and trading strongly throughout the pandemic.

Morrisons chief executive David Potts said the company was “grateful for the Government’s swift action at the start of the pandemic” as he announced the firm would pay the £274 million it saved.

Business Secretary Alok Sharma said Tesco’s move was a “very welcome gesture”.

The Co-op said the amount spent on protecting staff and customers outweighed the savings.

It added: “Given the huge uncertainty we’re facing into still and the ongoing costs we are incurring, we’ll consider our approach in terms of the Government support we’ve received at year end.”

And a spokesman for Waitrose-owner The John Lewis Partnership said: “We are incredibly grateful for this vital support because we have lost significant sales while our John Lewis shops have been closed, and have invested heavily to keep our partners and customers safe.

“The outlook remains incredibly uncertain and Government support remains crucial to help us navigate the crisis.

“We’re a business owned by our employees – our partners, not external shareholders – and we don’t intend to pay a bonus this year.

“Whenever we make any money, it is invested in our partners, our business and charitable giving.”

Conservative MP Esther McVey tweeted calling on supermarkets to follow suit.

She wrote: “Tesco is leading the way & returning £585 million back to government – the business rates exemption provided during the pandemic.

“Other supermarkets need to follow suit. Whilst they don’t need this money others do.”

Data compiled last month for the PA news agency by real estate adviser Altus Group projected that the UK’s four largest grocers – Tesco, Sainsbury’s, Asda and Morrisons – and German rivals Aldi and Lidl would save around £1.87 billion as a result of the rates holiday.

This was set to represent more than a sixth of the total £10.1 billion 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. It is understood this will be via HM Revenue and Customs.

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 £551 million in the six months to August 29 – an almost 29% increase compared with the same period in 2019.

Sales during that period were up 0.7% to £28.7 billion, with sales in the UK and Ireland up more than 8%.

Early in the pandemic, Tesco and rival supermarkets faced criticism for taking the rates relief at the same time as handing out dividends to shareholders. It did not use the Government’s furlough scheme.

Robert Hayton, head of property tax at business rates specialist Altus Group, said: “It should have been obvious from the outset that not all businesses would need the same level of taxpayer support through the pandemic.

“It is great that Tesco has taken the lead and repaid this relief.

“The Government must now redeploy that revenue to where it is most needed.”

Rates relief was first announced by the Chancellor for retail, leisure and hospitality firms until March 2021.

The data from Altus Group showed that Sainsbury’s is expected to save £498 million from its rates holiday for the year – although Sainsbury’s said it was closer to £450 million.

Last month, Sainsbury’s said it had received a break worth £230 million for the half year to September in an update which also saw it reveal plans to axe 3,500 jobs.

However, the company came under fierce criticism as it also declared an interim dividend of 3.2p plus a special dividend of 7.3p for shareholders.

In November, the boss of value retailer B&M Bargains, which has stayed open through the lockdowns, paid his offshore family trust £44 million in dividends as it saved £38 million through the rates holiday.

The figures from Altus show Asda is projected to save £297 million, Aldi £109 million and Lidl £108 million, for the year.

In Wales, the six major supermarkets still had to pay around £78 million for rates for some stores as a result of devolved business rates.



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