Sainsbury’s chief executive Mike Coupe has slammed the current system of business rates as “archaic”.
Speaking ahead of the controversial revaluation that will hit bills in April, Coupe said the move could pose “serious challenges” to the high street and result in “ultimately more closures”.
“It could impact investment in places that most need it, in areas of the country where there is already a marginal call on investment,” he argued.
Coupe criticised the system for failing to take into account new online players in the market. “The way it currently stands, there is an advantage for those without bricks-and-mortar operations, so there’s a strong case for a level playing field in business rates and taxation more generally,” he said. “Businesses like ours with lots of property and employees face a bigger burden than others.”
The government’s first revaluation of business rates in seven years is due to see taxes on some properties rise dramatically - particularly in London, where values are set to shoot up by an average of 26.2%.
Sainsbury’s annual bill across its entire estate is expected to rise from £483m to £500m. But The Grocer reported last year that the big four will see massive savings in some stores, particularly those in out-of-town locations. The rateable value of Sainsbury’s in Bath Road, Reading - currently the highest of any supermarket in England and Wales - will fall from £4.9m to £4.5m, saving more than £200,000 a year.
However, the reforms will do little to address the disparity between bricks-and-mortar and online operations. Last year, The Grocer reported that Amazon paid an annual bill of £10m in business rates - the same amount as 15 small supermarkets - despite its annual turnover exceeding £5bn.
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