Lidl agrees to hand back £100m saved in business relief

LONDON: Lidl has become the latest retailer given “essential” status to agree to hand back millions of pounds in business rates relief to the government.

The supermarket said it would return £100 million, claiming to have “brought forward” plans to make the payment following similar moves by rivals.

Pets At Home also announced on Friday that it would repay £28.9 million it saved on the property tax.

The total committed by essential retailers is £1.95 billion. Lidl said the rates relief was vital during the first lockdown, allowing it to make Covid-related upgrades and investments. But bosses said that, as stores become busier, it is “well placed to manage any further changes to the business as a result of the pandemic, and therefore has brought forward plans to return the relief”.

Lidl GB chief executive Christian Hartnagel said: “The business rates relief that was provided to us, and the rest of the supermarket sector, came with a lot of responsibility that we took extremely seriously. “We’ve been considering this for some time, and we are now in a position to confirm that we will be refunding this money as we believe it is the right thing to do. We feel confident that the business is well positioned to navigate and adapt to any further challenges brought by Covid-19.” Earlier in the day, Pets At Home said it was repaying the money as the emergence of a Covid-19 vaccine had allowed it to reassess the levels of uncertainty and that trading remains strong. The moves follow a similar decision by discount retailer B&M, which said on Thursday afternoon that it will repay savings of “around £80 million”.

Asda also said on Thursday that it will return more than £340 million it saved from the rates holiday, following moves by Tesco, Sainsbury’s, Morrisons and Aldi.

Waitrose, Marks & Spencer and Co-op have said they will not be making similar moves because the savings are needed to offset the Covid-related costs. Pets At Home said the decision “reflects the company’s guiding principle of treating all stakeholders fairly and is supported by the continuing strong performance of the business”.

It pointed out that the retailer, which has more than 400 stores across the UK, spent £35 million on Covid-related costs and had previously said the rates holiday would offset them.

But on Friday chief executive Peter Pritchard said the company will make the payment. “Our decision today demonstrates our clear commitment to acting responsibly and treating all of our stakeholders fairly.”Pets At Home has seen a surge in sales during the pandemic, benefiting from a self-described “baby boom” in new pet owners.

Earlier on Thursday, Aldi and Sainsbury’s said they will hand back more than £500 million in business rates relief to the government.

It came after rivals Tesco and Morrisons made the same commitment on Wednesday.

The decision by the retailers means almost £2 billion will be returned to the government and puts more pressure on rivals to follow suit.