SAINSBURY’S board has chosen to “forego” the business rates relief on stores granted by the UK Government the Devolved Administrations since March.
The company announced that sales and profits had been stronger than originally expected, despite lockdown restrictions remaining in place longer than expected.
Sainsbury’s since announced that due to this a decision was taken to forego the business rates relief on all stores.
Simon Roberts, CEO of Sainsbury’s said “We have been proud to play our part in feeding the nation in this extraordinary year and every one of our colleagues has gone above and beyond to support each other, our customers and our communities.
“While we have incurred significant costs in keeping colleagues and customers safe, food and other essential retailers have benefited from being able to open throughout.
“With regional restrictions likely to remain in place for some time, we believe it is now fair and right to forego the business rates relief that we have been given on all Sainsbury’s stores.
“We are very mindful that non-essential retailers and many other businesses have been forced to close again in the second lockdown and we hope that this goes some way towards helping them.”
“We remain focused on delivering the plan we set out at our half year results. We continue to urge government to review the business rates system to create more of a level playing field between physical and online retailers.”
The company makes the announcement after their based assumption for the 2020/2021 financial year negative impacts of COVID-19 would be offset bye stronger sales and £450m of businesses relief.
The business now expects a UPBT (underlying profit before tax) of at least £170m for the financial year to March 2021.
After publishing a strategy update in November Sainsbury’s added: we continue to expect UPBT in the financial year to March 2022 to exceed the £586 million reported in the year to March 2020, despite now forgoing business rates relief of approximately £30 million.”
The report adds that a cash flow of £500m is expected every year for the next three years to March 2025.
Sainsbury’s added “As a consequence, while we expect to make good progress towards our target of at least £750 million net debt reduction in the three years to March 2022, we now expect to achieve this target by March 2023.”