Tesco bosses build support for online sales tax

The supermarket giant’s chief financial officer Alan Stewart has written to bosses of its bricks-and-mortar competitors to sound out appetite for the new levy.

Tesco supremo Dave Lewis wants the government to slash business rates by 20% and make up the shortfall with a 2% tax on all online sales in a bid to level the playing field between traditional retailers and ecommerce giants such as Amazon.

According to the Press Association, Stewart has sent the letter drumming up support to at least three other major supermarkets. Leaders of non-food retailers are also understood to have received the note.

Lewis is leading the charge on business rates following years of campaigning from retailers on the issue.

A number of businesses have collapsed or launched CVAs in recent years in an attempt to reduce their property costs.

Rising business rates have been regularly highlighted as one of the primary causes of pain on retailers’ bottom lines.

Some companies have complained that the likes of Amazon, Asos and Boohoo are able to sell at cheaper prices because rates on out-of-town warehouses are less than those on properties in prime high street locations.

Tesco is cutting costs across the business in a bid to fight back. Just last week it revealed it was to cut another 4,500 jobs across its Metro store estate. That came just months after the grocer revealed 9,000 job losses.

The Co-op is one of the businesses that has come out in support of Lewis’ plans to introduce an online sales tax to help level the playing field.

Co-op boss Steve Murrells told the PA: “There’s not a week goes by when another household name either announces it’s closing or markedly reducing its presence on the high street.

“There’s clearly a reset occurring on the high street and as has always been the case, businesses need to evolve in line with their customers and their customers’ needs.

“But there is a bigger picture here. Derelict and abandoned high streets don’t only tell a tale of lost jobs and reduced economic activity in our town and city centres, they tell a tale of spaces that were once positively used to connect people physically with their town and each other.”

Last week, Revo, the body that represents retail property landlords, wrote an open letter to the new chancellor Sajid Javid calling for an urgent review of the business rates system.