More than 100 large supermarkets ‘at risk of closure’ thanks to business rates reforms

More than 100 large supermarkets are said to be at risk of closure thanks to plans to increase business rates for the largest properties from next year.

About 50 of Sainsbury’s 600 supermarkets will become unprofitable as a result, as will “tens” of Tesco stores, according to the Financial Times, which cites supermarket insiders.

Under the Non-Domestic Rates Bill, which became law earlier this year, business rates are set to rise from 2026 across all sectors for properties with a rateable value of more than £500,000 a year. The additional tax collected is intended to fund a business rates discount for smaller properties in retail, hospitality and leisure, with a rateable value of less than £500,000.

Read more: Thousands of supermarkets face higher business rates from 2026 as bill becomes law

The changes are said to threaten the viability of 30 of Morrisons’ roughly 500 supermarkets, though an insider said this would not necessarily result in their closure.

The changes will also hand an advantage to the discounters thanks to their smaller stores. Less than 10% of Lidl’s stores will be in scope of the higher rate, according to estimates from property consultancy Colliers.

In contrast, almost 90% of Asda’s roughly 600 supermarkets will reportedly be impacted.

Asda did not provide a comment. Tesco, Sainsbury’s, Morrisons and Lidl were approached for comment. 

Read more: Higher business rates aimed at ‘online giants’ will hit 1,900 superstores and hypermarkets

Colliers also estimated that major supermarket players including Tesco, Sainsbury’s, Asda, Aldi, Morrisons, Lidl and Waitrose had already collectively seen their rates bills rise by £35m from April this year, thanks the standard multiplier increasing in line with inflation.

The BRC has said the rates reforms – which the government billed as way of levelling the playing field between the high street an online giants – should not result in higher bills for any retailers, to avoid further job losses in a sector already grappling with tax hikes in last year’s budget.

In July, the chiefs of Tesco and Sainsbury’s threw their weight behind calls for Chancellor Rachel Reeves to rethink the plans. Tesco Group CEO Ken Murphy and Sainsbury’s CEO Simon Roberts said it would worsen the plight of high streets by undermining investment from larger retailers, which act as anchors for footfall.