Tesco has announced that it will repay £585m in business rates relief to the UK government and devolved administrations.
The supermarket said it was “immensely grateful” for the financial and policy support provided by the government, adding that the rates relief was a “game-changer” for all retailers.
It noted that the relief gave it the “immediate confidence” to invest in its employees, and support customers and suppliers, adding that “every penny” of the support went towards its Covid-19 response.
Nonetheless, the group estimates that its response to the pandemic will cost the business around £725m this year, “well in excess” of the £585m rates relief received.
It comes as the supermarket said that the impact of Covid-19 was immediate and “potentially disastrous” for food retailers, and there was a “real and immediate risk to the ability of supermarkets to feed the nation”.
According to Tesco, its business has proven “resilient”, however, adding that some of the potential risks faced earlier in the year “are now behind us”.
In light of this, it will work along both the UK government and devolved administrations to find the “best means” of repaying the rates relief in full.
CEO Ken Murphy said: “Our colleagues have done an exceptional job in responding to the challenges of the pandemic.
“We have invested more than £725m in supporting our colleagues, putting safety first, more than doubling our online capacity to support the most vulnerable customers in our communities, and hiring thousands of additional colleagues at a time of need.”
He added: “While business rates relief was a critical support at a time of significant uncertainty, some of the potential risks we faced are now behind us.
“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.”
John Allan, chairman, said: “The board has agreed unanimously that we should repay the rates relief we have received. 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.”