Asda follows rivals to hand back £340m in rates relief

Asda has announced it will hand back £340m in business rates relief, becoming the latest grocer to return funds from the tax break following similar moves by Tesco, Sainsbury’s, Morrisons and Aldi.

Sainsbury’s said it has incurred significant costs in keeping colleagues and customers safe

Aldi and Sainsbury’s will hand back more than £500m in business rates relief to the Government. Rivals Tesco and Morrisons made the same commitment on Wednesday.

The decision by the five grocers means more than £1.7bn will be paid to the Government and puts pressure on rivals to follow suit.

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Asda president and CEO, Roger Burnley, said: “Throughout the pandemic we have always sought to do the right thing – fulfilling our role in feeding the nation, protecting our colleagues and supporting our communities.

“But, as the hope of a vaccine and a more ‘normal’ life returning in 2021 grows, we have confidence that we are in a strong position to again do the right thing for the communities we serve.

“Almost half our customers are telling us they expect their financial position to worsen in the next 12 months and we recognise that there are other industries and businesses for whom the effects of Covid-19 will be much more long lasting and whose survival is essential to thousands of jobs.”

Sainsbury’s said it will hand over £440m and discount retailer Aldi will give back its tax break of more than £100m.

Tesco has announced it will hand back £585m and Morrisons will return £274m.

Downing Street welcomed the grocers’ decisions to hand back the cash.

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.

Simon Roberts, Sainsbury’s CEO, 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.”