Fresh Scottish Government boost as Sainsbury's, Asda and Aldi join rivals in handing back millions

Sainsbury’s and Asda have joined big four rivals Tesco and Morrisons to hand back millions of pounds saved from a business rates holiday, in a move that will boost Scottish Government coffers.

Sainsbury's is one of the UK's four big supermarket operators and also owns the Argos business. Picture: Dan Mullan/Getty Images

The decision by the Argos owner to hand back £440 million and Asda to waive £340m of relief means that the four supermarket giants will be repaying some £1.6 billion to the UK government and devolved administrations. Tesco had already announced that it would hand back £585m and Morrisons £274m.

Meanwhile, discount retailer Aldi has announced plans to give back more than £100m.

Business rates are devolved in Scotland so there will be consequentials as a result of the Barnett formula. Following Tesco’s decision to hand back £585m, the Scottish Government forecast a £60m benefit.

Bosses at Sainsbury’s said sales and profits have been stronger than expected since the start of the second national lockdown in England and the payment will come despite spending £290m on making the business Covid-safe.

Chief executive Simon Roberts 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.

“We continue to urge government to review the business rates system to create more of a level playing field between physical and online retailers.”

The business rates holiday was announced in March by Chancellor Rishi Sunak, aimed at helping retailers and hospitality firms forced to close due to the pandemic.

Asked on Wednesday if it would match the Tesco pledge, the Co-op said the amount spent on protecting staff and customers outweighed the savings.

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

A spokesman for Waitrose-owner 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.”

Early in the pandemic crisis, Tesco faced criticism for taking the rates relief at the same time as handing out large dividend payments to shareholders. However, it did not tap into the government’s furlough scheme.

Tesco chief executive Ken Murphy said: “While business rates relief was a critical support at a time of significant uncertainty, some of the potential risks we faced are now behind us.”

A message from the Editor:

Thank you for reading this article. We’re more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers. If you haven’t already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription: www.scotsman.com/subscriptions