UK Supermarket King Tesco To Repay Virus Tax Relief

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 ($783 million, 652 million euros) in relief on business rates -- which is a tax levied on commercial property.

Prime Minister Boris Johnson's Conservative government launched costly and unprecedented support measures this year 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.

The London-listed group 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."

Tesco added 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 board has agreed unanimously that we should repay the rates relief we have received," said Chairman John Allan.

"We are financially strong enough to be able to return this to the public, and we are conscious of our responsibilities to society.

"We firmly believe now that this is the right thing to do, and we hope this will enable additional support to those businesses and communities who need it."

England on Wednesday exited a second lockdown but most of the country remained under strict restrictions as a new regional system for cutting coronavirus infection rates kicked in.

From next week, meanwhile, people across the UK will begin receiving a Covid vaccine.

Wednesday's tax relief announcement has sparked calls for other UK supermarket rivals -- including Asda, Morrisons and Sainsbury's -- to make a similar move.

"Tesco is leading the way and returning ?585 million back to government (for) the business rates exemption provided during the pandemic," said Conservative MP Esther McVey.

"Other supermarkets need to follow suit. Whilst they don't need this money -- others do."

Manchester mayor Andy Burnham, a former Labour MP, agreed.

"This is the right move from Tesco. I call on other supermarket giants to follow suit. Together they have had over ?1.3 billion in business rates grants," Burnham tweeted.

Back in October, Tesco posted a 42-percent jump in net profit in its first half on soaring online demand for food during the coronavirus outbreak.

Profit after tax jumped to ?460 million in the six months to the end of August compared with a year earlier, with sales fuelled by many Britons switching to doorstep grocery deliveries.

"The decision by Tesco to pay back business rates relief ... will crank up the pressure on its supermarket rivals to follow suit," noted AJ Bell investment director Russ Mould.

Tesco's shares fell 1.9 percent on Monday although the overall FTSE 100 climbed by 1.2 percent.