B&M and Pets at Home follow grocers and forego rates relief

Their return of cash totalling almost £110m by the pair followed similar action by big grocers yesterday including Aldi, Asda, Morrisons and Sainsbury’s.

B&M and Pets at Home were both able to trade during lockdown. B&M said that it ”welcomed the government’s business rates relief, given the disproportionate burden business rates places on physical stores versus online competitors, particularly at a time when the nature and duration of Covid-19 restrictions were unknown”. 

However it concluded that ”it is now right to forego the business rates relief granted to B&M, which is approximately £80m this financial year” The retailer, which has already returned furlough cash, said that it will engage with local authorities on ”an appropriate mechanism to waive the business rates relief”.

The retailer called on the government ”to create a level playing field that requires all essential and online retailers to contribute proportionately in terms of taxation and business rates”.

Pets at Home will return the £28.9m of business rates relief it received. It said the decision ”reflects the company’s guiding principle of treating all stakeholders fairly and is supported by the continuing strong performance of the business”.

The decision means that the financial impact of the pandemic on Pets at Home, estimated at about £35m, ”will no longer be offset by the rates relief received” but that it was ”more than ever, confident in the strength and longevity of our pet care platform and proud to be repaying the business rates relief from this position of strength”.

B&M chief executive Simon Arora said: “We are proud of the role we have played in this crisis, working very hard in our supply chain and stores to ensure our shoppers can rely on us for their everyday essentials, whilst creating over 1,800 new jobs, making charitable donations to local food banks, [and extending discounts to NHS workers.

”We request urgent reform of the outdated business rates system that is contributing to job losses across the retail sector and is acting as a deterrent to B&M and other potential occupiers taking up vacant space in many locations.”

Tesco’s decisin to forego rates relief has angered some other retailers who feel they are being bounced into a similar stance.

Not all businesses that stayed open during lockdown have decided to waive rates relief. A Co-op spokesperson said: “We’re still facing huge uncertainty and are incurring ongoing costs. We will consider our approach in terms of the government support we’ve received at year-end.”

A Poundland spokesperson said: ”While Poundland was classed as an essential retailer, it wasn’t one of the retailers that saw extraordinary levels of business during lockdown, like the supermarkets or Amazon. That’s because it trades largely on the high streets that closed for business and now need support to get back on their feet.

”It’s hard to understate the importance of the rates holiday to Poundland to help protect its business, invest in the measures it put in place to trade safely and maintain employment.  

”Poundland remains of the view there needs to be a rebalancing of the cost of doing business between those online and supermarket retailers who were winners from covid and able to pay large dividends, and those who continue to support the high streets that are important to communities.”