Leading supermarkets have written to chancellor George Osborne in a fresh plea for action to cut the burden of business rates, claiming that without it they cannot afford to pay his plans for a new National Living Wage.
With the minimum hourly rate to increase from £6.50 to £7.20 in April 2016, store workers are among those most likely to benefit.
However, it is understood that a BRC letter, signed by leading supermarkets including Tesco, Sainsbury’s and Asda, tells Osborne he must take urgent action on rates first.
“The letter flags up two basic truths,” said a source involved. “Retailers have two big costs: people and property. Currently they are being squeezed on both fronts with rates and NLW. It’s just not sustainable is it? A rates win would be the quickest, easiest and fairest way to alleviate the other measures.”
The chancellor has pledged to announce the results of the government’s review of business rates before the next budget, though retail leaders have warned that it will need wholesale reform rather than “tinkering around the edges”.
Since April this year, retailers faced paying a massive £700,000 a year per supermarket in business rates, according to figures obtained by The Grocer - despite government pledges to reduce the burden on the sector.
The figures, compiled by business rates expert Paul Turner-Mitchell from the Valuation Office Agency (VOA) website, showed large-format supermarkets - defined by the VOA as stores with over 27,000 sq ft - will pay on average 19%, or £111,153, more than in 2010/11.
The VOA investigation also revealed the top 12 individual supermarket ratepayers alone will contribute £26.4m in business rates to the Treasury by next April.
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