‘Big Four’ grocer Tesco has defended its £635m dividend payout to shareholders, despite it receiving a £585m tax break.
Last night (8 April), the company’s board approved a final dividend of 6.50p, bringing the full-year dividend to 9.15p. According to the Guardian, Tesco chairman John Allan said paying its shareholders was the “right thing to do” after they backed the grocer through a five-year accounting scandal.
Dave Lewis, chief executive of Tesco, added: “In 2019 our turnaround was complete and our financial performance last year allows us to finally pay out to those who have supported us on that journey, during which time dividends were either not paid or significantly reduced.”
However, Labour peer Andrew Adonis tweeted that Lewis should “resign for using a £600m state bailout to pay dividends” and added it was a “fundamental error of judgement and leadership”.
In a separate Tweet, Adonis said: “When Parliament returns I will call for it to be made illegal for companies to pay bonuses and dividends from state bailouts. And for there to be clawback of bailouts from companies which have done so like Tesco This is a straightforward issue of public morality.”
It comes after Tesco revealed that its sales rose 30% in the first few weeks of the coronavirus crisis, in light of increased stockpiling and panic buying across the country.
The retailer said the surge in sales has now stabilised, however, and the group has reported that normal sales volumes are now being experienced.
In light of the crisis, the group has also increased its capacity on Grocery Home Shopping by more than 20%, and will continue to increase this. It warned that there was “simply not enough capacity” to supply the whole market, however.