LONDON: Britain’s biggest retailer Tesco on Wednesday said it had decided to repay tax relief received this year as part of government help for coronavirus-battered businesses.
The supermarket giant will repay £585 million (RM3.18 billion) in tax relief on commercial property.
Tesco added that it had spent £725 million on a company-wide response to the emergency pandemic, including the creation of 16,000 jobs to meet booming online demand.
The British government launched unprecedented support measures to combat devastating economic fallout from the Covid-19 pandemic, including business tax relief and private-sector wage subsidies.
At the same time, the nation’s supermarkets have enjoyed surging online food sales, particularly during the first strict lockdown that began in late March and lasted for nearly three months.
“Ten months into the pandemic, our business has proven resilient in the most challenging of circumstances,” Tesco said in a statement on Wednesday.
It noted it had been able to keep its stores open during the crisis and that some of the potential risks faced earlier in the year are now behind it.
“We remain absolutely committed to doing the right thing by our customers, colleagues and all our stakeholders,” Tesco added.
“We are therefore announcing that we will return to the public the business rates relief received in full.”
Separately, British clothing and food retailer Marks & Spencer said it would not follow Tesco in returning business rates relief it has received from the government to help get it through the Covid-19 pandemic.
Sainsbury’s, Walmart’s Asda and Morrisons, which have all also claimed relief, all declined to comment.
M&S claimed business rates relief of £83.7 million in its first half to Sept. 26 and can claim for its second half too.
“We are very grateful for the much-needed support government has provided to businesses impacted by the pandemic â including ours,” said an M&S spokeswoman. “It has enabled us to support our colleagues and our suppliers, whilst continuing to serve our customers in what have been incredibly challenging circumstances.”
Unlike Tesco, which has been able to keep all its stores open through the pandemic, M&S has seen most of its clothing and home store space closed for extended periods.
In M&S’s food division, cafes and hospitality services, which prior to the crisis accounted for about 4% of food revenue, have been closed, while its franchise business, particularly in travel hubs, has been severely impacted.
Trading at M&S’s high street and town centre stores has also been hit by the major drop in customer footfall.
M&S reported a loss for its first half and did not pay shareholders a final dividend for the 2019/20 year and has said it does not anticipate paying dividends for 2020/21. Tesco said in October it would pay its shareholders an interim dividend. â AFP, Reuters
