Ken Murphy, chief executive of Tesco, has called on Chancellor John Healey to reform the business rates system, labelling it "fundamentally unfair." Murphy stated that retailers, on average, pay four times their fair share of rates and urged the government to implement a more equitable system.
Tesco's primary request for the upcoming budget is to exempt all retail businesses from the half-a-million-pound rateable value threshold. This comes as the Prime Minister is reportedly considering increasing the highest business rates multiplier to fund tax cuts for pubs and smaller shops, a move retailers warn could lead to higher prices for consumers if applied to warehouses.
The British Retail Consortium (BRC), representing major grocers, has also pressed Healey to reduce the tax burden on the retail industry. According to BRC analysis, retailers pay 72p in tax for every pound made, making it the second-highest taxpaying sector after hospitality.
Separately, Tesco lifted its profit forecast on Thursday following a boost in online sales, despite a slight dip in group like-for-like sales growth to 0.9 per cent in the second quarter. Murphy noted that British shoppers are proving "resilient" and reiterated Tesco's commitment to providing value for customers, stating that the company will not accept unjustified price increases from suppliers.