Sainsbury's is playing the long game by surrendering rates relief
The reputational gamble of hanging on to Treasury support is not worth taking if permanent reform is the goal
Sainsbury’s Christmas trading update was a demonstration of why the boards of all the big supermarket chains were obliged to come to their senses last month and concede that, yes, all that relief on business rates had to go back to the Treasury.
After surrendering relief worth £410m this financial year, Sainsbury’s expects to achieve pre-tax profits of £330m, an uncomfortable year-on-year decline of 44% from the previous £586m. But consider the alternative: if it had kept the money, Sainsbury’s would now be forecasting profits this year of £740m, a year-on-year increase of 26%, which would have guaranteed endless publicity about profiting from a pandemic.