Morrisons follows Tesco in returning Covid-19 emergency support
Morrisons has followed rival Tesco in deciding to pay back the business rates relief it received to help weather the coronavirus pandemic.
The supermarket chain will hand back £274m to the government, £230m of which relates to its 2020/2021 financial year.
In March the government waived all retail business rates for the financial year in an effort to cushion the blow of the pandemic.
But Morrisons said it had decided to pay the tax in full, adding that it was “grateful for the government’s swift action at the start of the pandemic”.
The retailer said it expected the total impact of coronavirus to be around £270m. This is around £40m higher than its previous estimates, due to impact of the second lockdown and tougher tier restrictions.
The move comes after Tesco said it would pay back £585m in business rates relief, ramping up pressure on its rivals to do the same.
In a statement this evening Morrisons said it had planned to make a decision on paying back business rates once the full cost and duration of Covid-19 became more clear, but had brought forward that decision.
Morrisons said that while the pandemic had taken its toll on profits, it expected full-year figures to be in line with expectations excluding the £230m rates repayment.
The supermarket said it will also pay a special dividend of 4p per share, which relates to the previously deferred payment for the second half of the last financial year.
“We are grateful for the government’s swift action at the start of the pandemic which enabled the whole sector to face squarely into the challenges and disruption caused by Covid-19,” said chief executive Dave Potts.
“Throughout this difficult period Morrisons has done its best work to look after our colleagues, our customers and key workers, to feed the nation, to protect both the vulnerable and our smaller suppliers and to play a full and leading role in meeting the enormous challenges that the Covid-19 pandemic brought.”