Belfast Telegraph

Tesco commits £1bn to province but slams levy

By Margaret Canning

The head of Tesco in Northern Ireland has said it has become an "uncompetitive" location because of its large retail levy.

The supermarket, which has revealed its first drop in profits in two decades, today opens a £24m superstore creating 90 new jobs on Castlereagh road, east Belfast.

Around 140 staff have been moved from the Tesco store in Connswater, east Belfast - which is closed for refurbishment and will reopen next month as a Tesco Metro.

The new, 43,000 sq ft Castlereagh store, the 52nd Tesco in the province, includes electricals, toys and clothing departments, an instore bakery and a meat counter manned by Primacy Meats, a butcher's based in Bangor.

While projects like Castlereagh and its first Newry opening next year - conceived before the levy was introduced - were continuing, Mr Mills said Northern Ireland would be at a disadvantage when competing for future company capital because of the so-called 'Tesco Tax'.

The large retail levy was introduced by Finance Minister Sammy Wilson this year as a means of gathering additional revenue to help small businesses.

Opposing it, the Northern Ireland Retail Consortium argued it would cause the loss of 400 jobs per year, while Tesco previously said it would jeopardise a planned investment of £100m, creating 1,500 new jobs, over the next three years.

Mr Mills said last week the new stores were "in the pipeline" before the levy but added: "The large retail levy makes Northern Ireland, in the Tesco world, uncompetitive.

"When you are vying for your share of capital, Northern Ireland - with the large retail levy - is not as competitive.

"The return you get is not as favourable as before you make any return you have a large retail levy to pay.

He added: "It's a consideration you have to make before you invest and it's not good for business."


Tesco has also announced today that the value of purchases from suppliers in Northern Ireland would climb to £1bn in the next two years, up from £50m when it first opened in the province in 1997. New arrivals included Ditty's Oatcakes and Clandeboye Yogurt. Others with a long supply relationship include potato firm Wilson's Country, ice-cream maker Dale Farm and crisps brand Tayto. Mr Mills said: "Since March this year alone, we have introduced more than 200 new local lines, with many more in the pipeline."