Over 100 big supermarkets including Asda and Tesco branches risk closing

Over 100 supermarkets in the UK could face closures as planned business rate increases are likely to come into effect soon. The rise in the business rate could severely impact firms includingTesco, Asda, Sainsbury's and Morrisons.

Around 50 of Sainsbury's 600 larger stores will become unprofitable, while Tesco will see "tens of stores" tip into the red, it has been reported. It comes as the government under Rachel Reeves is working to increase the rates for businesses with properties that are worth more than £500,000. Supermarkets like Sainsbury's and Tesco, which made £420 million and £1.2 billion in profit last year, are expected to manage the changes better than Asda and Morrisons, which have more debt.

The move could also impact 90 percent of Asda stores across the country, reports The Financial Times. However, Lidl and Aldi will be refrained from the increased charges as they operate in smaller premises as compared to the other major supermarkets.

The Treasury said: "We are creating a fairer business rates system to protect the high street, support investment and level the playing field.

"We intend to introduce permanently lower tax rates for retail, hospitality, and leisure properties from next year. Unlike the current relief for these properties, there will be no cash cap on the new lower tax rates."

Government officials claim the rate hikes are meant to support smaller shops and hospitality venues with extra funding. However, some business owners-like Tim Martin from Wetherspoons-argue that the increase could damage high street trade.

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."

The development 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 major restructuring will lead to over 3,600 job losses, adding pressure to the already struggling UK high street. This news comes just as the retailer reports its first profit since being taken over by private equity in 2021.