Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Some breaking news to start the morning – Tesco, UK’s largest supermarket chain, is repaying £585m of business rates relief it received during the coronavirus pandemic.
Tesco announced the move this morning, following criticism that the supermarkets didn’t need the help – as they have enjoyed a sales boost during the crisis, and kept paying dividends to investors.
Tesco says it is “immensely grateful” for the financial and policy support provided by the governments of the UK – including the 12-month break on business rates granted to all retailers.
This was a game-changer and allowed us to ensure customers got access to the essentials they needed.
The chain says it faced “significant uncertainty” earlier this year — panic buying, severe pressure on supply lines, major safety concerns and the risk of mass absences from work.
The group also points out that the costs of Covid-19 have been considerable:
Every penny of the rates relief we have received has been spent on our response to the pandemic. Our latest estimate at our Interim Results in October was that COVID would cost Tesco c.£725m this year – well in excess of the £585m rates relief received.
But having kept trading through the pandemic, Tesco has now concluded that it can return this saving.
Ten months into the pandemic, our business has proven resilient in the most challenging of circumstances. While all businesses have been impacted – many severely so – we have been able to continue trading throughout, serving many millions of customers every day and although uncertainties still exist, some of the potential risks faced earlier in the year are now behind us. We remain absolutely committed to doing the right thing by our customers, colleagues and all our stakeholders.
We are therefore announcing that we will return to the public the business rates relief received in full. We will work with the UK Government and Devolved Administrations on the best means of doing that.
Dominic O’Connell
(@dominicoc)Breaking – Tesco decides to repay the near £600m of business rates relief it has received during the pandemic @BBCr4today #R4Today
This move will put pressure on other supermarkets to follow suit.
Sam Chambers
(@SamChambersDMC)Tesco are repaying the £585m business rates relief they received — a hugely significant move that will heap pressure on their peers to do the same
Altus Group, a property adviser, estimated last month that Tesco, Sainsbury’s, Asda, Morrison, Aldi and Lidl – will save a combined £1.9bn in combined business rates relief.
The news comes as England’s new three tier system comes into effect this morning, meaning non-essential shops can reopen – just in time for the Christmas rush.
Gyms, hairdressers and other personal care businesses can also resume, with the formal instruction to stay at home coming to an end. The “rule of six” will again apply for outdoor gatherings in all areas
The agenda
- 10am GMT: Eurozone unemployment figures for October
- 1.15pm GMT: US ADP survey of private sector payrolls
