Major UK supermarkets could be forced to shut scores of stores due to Labour’s planned business rate increases. Sainsbury’s, Tesco and Morrisons could have to shut some large stores, but Aldi and Lidl will not be impacted due to operating on smaller premises.
Over 100 of the UK’s biggest supermarkets are at risk as the Government plots to raise rates for businesses with properties that are worth more than £500,000. Sainsbury’s currently has 600 stores with 50 set to become unprofitable due to the new higher property charges, reports the Financial Times.
Not only this but several Tesco stores would also be at risk along with 30 Morrisons shops. For Asda, a huge 90% of its 600 stores could face difficulty, reports The Sun.
The Government is bringing in the rate increases to provide extra funding to smaller retailers and hospitality businesses.
Chancellor Rachel Reeves’ tax changes could make hundreds of supermarket chain locations financially unviable, with many more facing the increased levy, reports Birmingham Live.
The Government has defended the proposals, with the Treasury stating: “We are creating a fairer business rates system to protect the high street, support investment and level the playing field.”
However, Morrisons’ chief executive Rami Baitieh has called on the government to space out the “avalanche of costs”.
He said: “The National Insurance change adds insult to injury. The problem is that it’s an avalanche of costs that is coming all at once.
“So I have asked them, can we not defer some of it or go step by step, like a doctor would do — raising the dose with seven pills over seven days.”
With the next budget due in October, many supermarket chains remain uncertain about the impact it could have on their businesses.