// Lidl is the latest grocer to announce it will hand over business rates relief to the government
// The German grocer said the tax relief is worth over £100m
// The move comes after similar announcements from Aldi, Asda, Sainsbury’s, Tesco and Morrisons
Lidl has announced that it will pay over £100 million to the government due to the one-year business rates holiday that the Chancellor introduced as a result of the pandemic.
The German discount grocer said that while the business rates relief was “vital” in allowing it to make significant and quick unplanned investments in its operations, infrastructure and staff to manage customer demand, it was “well placed” to manage any further changes to the business and therefore has brought forward plans to return the tax relief.
Lidl added it would now work with the UK Government and Devolved Administrations on the best way to facilitate this.
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The move comes after Aldi, Asda and Sainsbury’s announced yesterday that they would hand back more than £800 million in business rates relief to the UK Government.
It follows rivals Tesco and Morrisons making the same commitment on Wednesday.
The decision by the five biggest grocers in the UK – along with Lidl – means almost £2 billion will be paid to the UK Government and puts more pressure on “essential” retail rivals to follow suit.
Two other retailers that have been allowed to stay open through lockdown as they were classed as “essential”, Pets at Home and B&M, have also announced they would hand over their savings from the business rates relief.
The business rates holiday was announced in March by Chancellor Rishi Sunak, aimed at helping retailers and hospitality firms forced to close due to the Covid-19 pandemic.
Waitrose, Marks & Spencer and Co-op have said they would not be making similar moves because the savings were needed to offset Covid-related costs.
Data compiled last month by real estate advisory firm Altus Group projected the UK’s Big 4 grocers – Tesco, Sainsbury’s, Asda and Morrisons, plus German rivals Aldi and Lidl – would save about £1.87 billion as a result of the one-year business rates holiday.
Altus Group added that the total saving for all “essential” retailers, which have been allowed to remain open in lockdown measures, is about £3.03 billion, from a total business rates bill of £10.1 billion.
“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,” Lidl GB chief executive Christian Härtnagel said.
“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.”
In the past nine months, Lidl said it recruited 2500 temporary colleagues and has been dramatically increasing stock levels, investing in infrastructure to ensure security of supply, and introducing safety equipment, including 4 million masks and 5000 protective checkout screens.
The retailer added that it would continue to “invest heavily” to ensure its staff, customers and suppliers stay safe, and that its long-term strategy remains unchanged.
In July, Lidl announced plans to open 25 new stores by Christmas and is on track to meet that target.
Its £1.3 billion investment plans for 2021 and 2022 included a target of opening of 100 additional stores across Great Britain, creating around 4000 jobs.
Lidl also recently announced its commitment to increase the wages of all colleagues on hourly rates, in line with those advocated by the Living Wage Foundation, directly benefiting over 80 per cent of its workforce.
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