Chancellor Rishi Sunak has come under fire for including supermarkets in his decision to give all retailers a 12-month holiday from business rates. At the beginning of the epidemic supermarkets were hit with panicked shoppers who left shelves bare and many companies hired extra staff to cope with the increase in demand. Tesco’s chief executive, Dave Lewis, defended the company’s decision to give a payout to investors. He said the money reflected performance in the year to February 29 – before the coronavirus crisis kicked off.
He said a huge amount of the cash would go towards pensions for vital workers and their families.
It comes as businesses across Britain are being pressured to temporarily halt dividend payments.
Banks and insurers have agreed to hold back dividends and conserve cash.
The economy is suffering heavily from the nationwide lockdown, which is expected to be extended by the Government next week.
Mr Lewis stood by his decision, saying companies who can afford to make payouts should do so because it would help keep the economy from becoming sluggish.
He said: “Every business is different with a different financial dynamic.
“We looked at whether the business needs more liquidity even in the most stressed scenario and it was decided we do not.
“We have a strong balance sheet and we do not need surplus cash.”
No Tesco staff members have been put on taxpayer-funded leave during the outbreak.
And the company has not taken VAT relief.
But critics have lined up to demand Tesco hand back the rates relief.
Former BBC Dragons’ Den business investor Theo Paphitis was among those calling on the supermarket to give the money back to help the NHS in its hour of need.
Tesco is not the first firm to push ahead with large dividends.
Last week Standard Life Aberdeen said it would pay out £300 million.
Recently Tesco has hired 45,000 new staff as the COVID-19 epidemic shows no signs of disappearing anytime soon.
A total of 50,000 Tesco workers are off sick or self-isolating on full pay.
Foreign Secretary Dominic Raab said on Thursday it was too early to look into lifting the lockdown and said it would remain in place over the Easter bank holiday weekend.