Tesco to repay £585m business rates relief in full

The supermarket chain said it will repay the £585m in business rates relief it received and work with the UK government and devolved administrations on the best way to do so.

Tesco has stressed that the entirety of the relief funds it received were used on costs associated with running its store estate and ecommerce division safely during the ongoing coronavirus pandemic, which it estimated had incurred £725m in costs at its interim results in October.

Despite this, Tesco’s recently appointed chief executive Ken Murphy said repaying the rates relief was “absolutely the right thing to do by our customers, colleagues and all of our stakeholders”.

“Our colleagues have done an exceptional job in responding to the challenges of the pandemic. We have invested more than £725m in supporting our colleagues, putting safety first, more than doubling our online capacity to support the most vulnerable customers in our communities, and hiring thousands of additional colleagues at a time of need.

“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.

“Every decision we’ve taken through the crisis has been guided by our values and a commitment to playing our part.”

Tesco said its business has remained resilient throughout the pandemic where many others have been “severely” impacted and that repaying its rates relief is therefore the right thing to do.

Chair John 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.”

Tesco is the first major grocer to pledge to return the rates relief it received and this decision will pile pressure on its rivals to follow suit.