Key Summary
- Labour may relax Sunday trading rules to offset higher business rates.
- Longer hours could hit smaller convenience stores.
- Supermarkets warn rate hikes risk closures.
Sunday trading laws could be relaxed to allow big supermarkets facing higher tax bills to open for longer, states a recent report. If this goes through, it is likely to have ripple effects on smaller-format convenience stores.
According to a recent report, Labour is assessing the rules after a backlash over its proposed business rates reforms, which would force thousands of large shops to pay more.
Currently, in England and Wales, large stores over 3,000 sq ft are only permitted to open for a maximum of six consecutive hours on Sundays, between 10am and 6pm.
Most supermarkets and large stores currently operate between 10am to 4pm or 11am to 5pm on Sundays.
Although discussions are still in their early stages, Treasury insiders have reported to have hinted that longer Sunday trading hours are being considered as part of a broader effort to alleviate concerns over proposed increases in business rates for large retailers.
This potential shake-up follows a meeting earlier this week between Chancellor Rachel Reeves and top executives from the UK's biggest retailers.
During the meeting, supermarket chiefs warned the Chancellor that the proposed increase in business rates for properties valued over £500,000 could result in widespread store closures and job losses.
Under legislation passed earlier this year, Reeves has the authority to raise the business rates multiplier by up to 10p for larger premises.
The aim is to use the extra revenue to provide relief to smaller shops and hospitality venues, but large retailers argue they are being unfairly targeted.
However, at the moment, there are no firm plans.
The report comes a month after a study claimed that more than 100 large stores run by the UK’s top supermarket chains are at risk of closure because of government plans to raise business rates, which would drive up costs for a sector already bearing the brunt of increased employment taxes.
Roughly 50 of Sainsbury’s 600 supermarkets will become unprofitable as a result of the higher property charges, according to people in the industry.
For Tesco, the UK’s largest private sector employer, the changes would tip tens of stores into the red, according to a senior figure at the company.
Sainsbury’s and Tesco, which generated net profits of £420mn and £1.2bn respectively last year, may be better able to weather the impact than their more heavily indebted rivals, Asda and Morrisons.