Labour's proposed business rate reforms could force the closure of more than 100 major supermarket outlets across Britain.
Sainsbury’s, Tesco and Morrisons face the prospect of shutting large stores as the Government prepares to raise rates on properties valued above £500,000.
The tax changes would render approximately 50 Sainsbury's stores financially unviable, whilst numerous Tesco outlets would also slip into losses.
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Morrison's faces potential closures at 30 of its locations, and nearly 90 per cent of Asda's approximately 600 stores would face the increased levy.
Discount chains Aldi and Lidl would largely escape the impact, as their smaller store formats typically fall below the £500,000 threshold that triggers the higher rates.
The financial impact would differ sharply between supermarket chains, according to industry insiders. Around 50 of Sainsbury’s 600 supermarkets are expected to become loss-making under the new property tax regime.
At Tesco, the UK’s largest private employer, senior figures warn that dozens of stores would be pushed into deficit by the additional charges.
Morrisons could see 30 of its nearly 500 outlets affected, although company sources stress this would not necessarily lead to closures.
Asda appears particularly exposed, with sources indicating that approximately 540 of its 600 supermarkets would be subject to the increased rates. Property specialists at Colliers calculate that fewer than 10 per cent of Lidl's estate would face the higher charges.
More than 100 Tesco, Sainsbury's and Asda stores could close
| GETTYThe Government maintains these measures will create a more equitable business rates framework, with the Treasury stating: "We are creating a fairer business rates system to protect the high street, support investment and level the playing field."
Ministers argue the reforms will increase tax contributions from distribution centres operated by major online retailers like Amazon.
The changes aim to convert existing temporary relief for smaller retail and hospitality premises into permanent lower rates.
Employers' national insurance contributions and minimum wage increases have already strained budgets across the industry
| PA/TESCOHowever, Tesco chief executive Ken Murphy criticised the proposals last month, saying "the reforms as proposed do not meet the original intention to rebalance the burden of business rates to be fairer and support town centres."
The broader retail sector, which provides employment for 2.8 million people, faces mounting financial pressures beyond the business rates changes.
Employers' national insurance contributions and minimum wage increases have already strained budgets across the industry.
Almost 90% of Asda's roughly 600 supermarkets would be affected by the business rate increases
| ASDAMorrison's chief executive Rami Baitiéh has called on the Government to phase in what he described as an "avalanche" of costs hitting retailers. The national minimum wage currently stands at £12.21 per hour and could rise to £12.86 next year
Industry associations warn that targeting larger stores, which employ one in three retail workers, could damage high street vitality by affecting supermarkets and department stores that generate significant footfall for town centres.