Tesco boss urges Chancellor to exempt retailers from higher warehouse tax
Tesco chief executive Ken Murphy urged Chancellor John Healey to exempt retailers from higher business rates on large warehouses as the supermarket reported its half-year results on Thursday. He said retailers are paying four times more than their fair share of rates and called for more equitable taxation.
Murphy called for an exemption for retail businesses from the higher business rates multiplier applied to properties with a rateable value above £500,000. Savills research showed high street retailers occupied 97 million square feet of warehouse space in 2024, compared with 69 million square feet used by online retailers. Tesco upgraded its full-year profit guidance, now expecting adjusted operating profit between £3.15 billion and £3.3 billion for the year to February 2027, up from a previous forecast of £3 billion to £3.3 billion. UK like-for-like sales rose 1.5 percent in the 26 weeks to 29 August, while group adjusted operating profit reached £1.78 billion.
“Retailers are paying four times more than their fair share of rates and I would urge the Government for more equitable rates,” Ken Murphy, Tesco CEO said.
“We genuinely believe rates need to be reformed and we urge the Government to exempt retailers from the threshold put in place last year,” Ken Murphy, Tesco CEO said.
The government is considering increasing the tax burden on large warehouses and out-of-town properties to fund business rates reductions for smaller high street businesses such as pubs and live music venues. Retailers have warned that the changes would disproportionately affect traditional high street businesses that operate extensive distribution networks, and analysis shows the highest business rates bills belong to warehouses run by Lidl, Tesco, John Lewis, Sainsbury’s and Marks & Spencer.
What we know
“Retailers are paying four times more than their fair share of rates and I would urge the Government for more equitable rates.”
Murphy called for an exemption for retail businesses from the higher business rates multiplier applied to properties with a rateable value above £500,000.
Research from property consultancy Savills found that high street retailers occupied 97m sq ft of warehouse space in 2024, compared with 69m sq ft used by online retailers.
The supermarket now expects adjusted operating profit of between £3.15bn and £3.3bn for the year to February 2027, up from its previous forecast of £3bn to £3.3bn.
UK like-for-like sales increased 1.5 per cent in the 26 weeks to 29 August, while group adjusted operating profit rose to £1.78bn.