Hundreds of UK supermarkets could close as Tesco, Asda and Sainsbury’s issued warnings

Supermarkets across the UK could be under threat, with a new government financial plan set to affect hundreds of branches across the UK – apart from two well known shops

Several supermarkets could face closure due to planned business rate increases set to take effect soon. Some of the branches at risk include Tesco, Asda, Morrisons and Sainsbury’s.

In latest plans, the government is plotting to raise rates for businesses with properties that are worth more than £500,000. Now, the Financial Times said that almost 50 of Sainsbury’s 600 supermarkets will become unprofitable as a result of the higher property charges. Adding to this, several Tesco stores are at risk, as well as 30 of Morrisons’ 500 sites.

The source says it could also affect 90% of Asda stores across the UK. However, both Lidl and Aldi have managed to avoid the increased rates, due to the fact they operate in smaller premises.

Officials say the rate increases to provide extra funding to smaller retailers and hospitality businesses – but some business owners, such as Tim Martin of Wetherspoons, said the hike will harm the high street.

He told the Sun: “The pandemic obviously had a big effect on the hospitality industry and it’s taken some time to recover. But we’re affected by a difficult regulatory and taxation regime.”

Some owners see this as yet another blow, after Chancellor Rachel Reeves increased employer National Insurance contributions and the national minimum wage in April.

This comes just two weeks after Morrisons announced plans to shut down over 50 of its in-store cafes and several Morrisons Daily convenience stores nationwide.

The restructuring will result in a loss of more than 3,600 jobs, dealing another blow to the UK high street.

The announcement comes as the retailer bounces back into profitability for the first time since its private equity takeover in 2021.

The company reported a pre-tax profit of £2.1billion for the year ending October 27, 2024, a stark contrast to losses of £919million the previous year and £1.3billion the year before that. A significant chunk of this profit, £2.6billion, came from the sale of its petrol forecourts to Motor Fuel Group.

While the forecourt sale was a major contributor to the profit turnaround, Morrisons also saw an improvement in its underlying performance. Losses from continuing operations were slashed by half, dropping to £538million from £1.09billion.

The supermarket chain also posted a 3.9% increase in like-for-like sales and a 4.2% rise in total sales to £3.9 billion in the second quarter of its current financial year.

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