Tesco, the UK’s largest supermarket chain, showed an almost 29% increase in pre-tax profits during the first half of 2020.
Tesco has announced its intention to repay £585m of business rates relief it received during the pandemic, saying the risks of the Covid-19 crisis were now behind it.
The supermarket chain is now believed to be investigating ways to return the sum to the Treasury and the UK’s devolved administrations.
Supermarkets have been under increasing pressure to announce such a move, after analysis of government data shows that £1 in every £6 of rates relief was awarded to either Tesco, Asda, Sainsbury’s or Morrisons, otherwise known within the UK as the ‘Big 4’. The chains enjoyed strong performances during lockdown, allowed to remain open throughout while many smaller chains and indie stores were forced to temporarily shutter. For Tesco, lockdown sales surges resulted in a rise of pre-tax profits of almost 29% for the first half of 2020.
Tesco said on Wednesday that the rates relief proved a ‘game-changer’ in giving the grocery sector the confidence to invest at a time of crisis – from hiring thousands of staff to bolstering delivery fleets.
“For food retailers, the impact was immediate and potentially disastrous: panic buying, severe pressure on supply lines, major safety concerns and the risk of mass absences from work, culminated in a real and immediate risk to the ability of supermarkets to feed the nation,” a statement read.
Chief executive Ken Murphy, who took over the job from Dave Lewis in October, said the board took a unanimous decision to repay the money: “Every decision we’ve taken through the crisis has been guided by our values and a commitment to playing our part. In that same spirit, giving this money back to the public is absolutely the right thing to do by our customers, colleagues and all of our stakeholders.”