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Tesco CEO Dave Lewis blames business rates for retail struggles

Published on: June 13th, 2018

The boss of Britain’s biggest supermarket has blamed the collapse of some retailers partly on the expense of business rates.

Speaking to the BBC, Dave Lewis, Tesco chief executive, said the charges that firms pay on their buildings played a “large part” in sending some retailers to the wall. Last year a revamp of business rates saw some bills rise, while others fell.

He questioned whether raising business rates was resulting in an “uneven playing field” for some firms.

Commenting on how retail is the UK’s biggest private sector employer, Dave said: “Are we allowing it to stay competitive, or are we by stealth lowering corporation tax and increasing business rates to a place which is creating an uneven playing field and forcing people to think about how it is they avoid that cost and find other routes to the market?”

The Tesco boss said business rates was the biggest tax his company paid, adding up to more than £700m a year.

“You need a level playing field … between an online digital world and a traditional retail store base model like the one we have,” Dave said.

Dave also took ministers to task for ignoring retail – as well as the food industry – in the government’s industrial strategy. His plea for action on business rates echoes comments made last year by Mike Coupe, chief executive of rival supermarket Sainsbury’s. He called for “fundamental reforms” to the “archaic” business rates system, which ignored the rise of online retailers based in out-of-town warehouses.

Despite the hefty charges faced by retailers with large numbers of physical stores, Dave says shops are “definitely here to stay.”

He conceded that Tesco has more retail space than it needs, prompting it to try ideas like bringing in other brands such as Holland and Barratt to offer customers something different.

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