Sainsbury's Boss Calls for Business Rate Cuts

The CEO of Sainsbury’s has declared the current business rates tax system “no longer fit for purpose,” warning that planned increases could lead to widespread high street closures and significant job losses. Business rates, a property tax impacting various sectors including retail and hospitality, have come under fire as Sainsbury’s and the shopworkers' union Usdaw advocate for a suspension of increases and a 20% reduction in overall rates payments for retail. Research conducted by Development Economics indicates that if the current inflationary trajectory continues, the retail sector could see approximately 17,300 store closures by 2033/34. The study also projects that the government could lose nearly £5.5 billion in tax revenues over the next decade due to these closures. Sainsbury’s argues that the existing business rates system fails to adapt to the evolving shopping habits of consumers and the significant changes within the retail industry over the past decade. In response to the crisis, the Labour Party has pledged to reform the business rates system, aiming to create a more equitable environment for high street retailers compared to their online counterparts. While Labour has committed to ensuring that any tax reductions are revenue-neutral, specific details on the proposed reforms remain undisclosed. Usdaw’s general secretary, Paddy Lillis, emphasized the urgent need for a coordinated approach to address the challenges facing the retail industry, highlighting the potential for high job losses and store closures that threaten the vitality of high streets and local communities.