Co-op to hold ‘crunch talks’ over relief repayment
A ‘deep division’ has reportedly emerged within the group’s board as directors are split over the issue of repaying
The Co-operative Group will reportedly hold a “crunch” board meeting next week to discuss whether it will repay £80m in government support funding, according to Sky News.
According to Sky, Co-op directors, alongside chairman Allan Leighton, will now meet next Tuesday to discuss whether the group will repay the funding it received in the form of business rates relief and furlough payments.
Sources told Sky that a “robust dialogue” has ensued, with directors reportedly split over the issue, and that “deep divisions” are expected to emerge amongst the board.
They added that the group would be under “enormous pressure” if it decided to keep part or all of the £80m in relief whilst continuing to pay the bonuses of CEO Steve Murrells and other senior colleagues.
The source said: “As well as the business has been managed, there is no way they can pay bonuses and keep taxpayers’ money. It would be catastrophic for the brand.”
It comes as other supermarket groups have notably repaid the funds, with Tesco becoming the first to do so late last year, repaying £585m of business rates relief to the government. Aldi, Asda, Lidl and Morrisons have also followed suit.
In addition, Sainsbury’s has this week announced that it intends to forgo the business rates relief on its stores this year, after previously repaying £440m in business rates relief to the government last year.
In a statement released on Wednesday (3 March), Sainsbury’s said: “Despite significant ongoing costs associated with protecting colleagues and customers from Covid-19, we expect that the vast majority of Sainsbury’s stores will remain open this year.
“We will therefore forgo the business rates relief on all Sainsbury’s stores again this year. We will also forgo the business rates relief on all standalone Argos stores once they re-open.”
Co-op’s final decision on the repayment of the support is expected to be published in the group’s annual results announcement early next month.
Retail Sector has contacted the Co-op for comment.
