Don’t cry to mother if rates freebie comes back to bite


Here’s another name to add to the list of retailers who will keep their relief on business rates – thanks very much, dear chancellor – even though their stores were open during lockdown.

It’s Pets at Home, which joins all the big supermarket chains and discount merchant B&M in the brazen bracket. There were mitigating factors in Pets at Home’s case – for example, it stopped the sale of pets for a while to discourage outings to its “free zoos” – but a 5% rise in half-year revenues says help from the public purse wasn’t necessary.

Over at AO World, the online appliances retailer isn’t taking any assistance – though the sums, one should say, would have been tiny in its case. But founder and chief executive, John Roberts, makes a good point: maybe the supermarket bosses should ask their mothers about the fairness of accepting rates relief when a lockdown has put a rocket under your revenue line. His thought flows from the second part of his folksy motto: “Treat every customer like your gran, and make your mum proud.”

We know how Ken Murphy at Tesco, Simon Roberts at Sainsbury’s and the rest of them would reply, of course. They would say they were “feeding the nation” and clocking up extra costs via additional staffing costs and PPE bills.

Would their mums give them a pat on the head? Who knows, but the rest of us shouldn’t. Rishi Sunak wasn’t distributing pocket money. Tesco, Sainsbury’s, Asda, Morrisons, Aldi and Lidl will collectively save nearly £2bn in rates bills this financial year, even as their revenue lines surge. That money could surely have been better used in the events and hospitality industries, to mention just a couple.

Howden Joinery remains the biggest stock market name to repay a hefty business rates discount – £8m – after saying the help wasn’t needed. It deserves applause. As for supermarkets, they can legitimately grumble about the unfairness of a property-based business rates system in an online age. But they cannot be shocked if reform is delayed.

Not such a good Long goodbye
Farewell, Peter Long, executive chairman of Countrywide since January 2018. He promised to get the UK’s biggest chain of estate agents “back to basics”; now he’s resigned after a basically miserable reign.

He leaves a set of quarrelling shareholders and an unresolved scrap between would-be rescuers, which, on the face of it, makes it an odd moment to go. The explanation, of course, is that Long’s exit “with immediate effect” is essential to resolving the mess.

Long’s plan A – a £90m capital injection at 135p-a-share from Alchemy Partners, a private equity firm – infuriated a couple of Countrywide’s major investors, who deemed the terms too mean. They were right too: Connells, owned by Skipton Building Society, soon turned up with a takeover offer at 250p.

The shareholders can now sift the options themselves, which will mean taking Connells’ offer, getting better terms from Alchemy or something else. At a push, one could give Long credit for going quietly, thereby allowing incoming chief executive, Philip Bowcock, former boss at bookies William Hill, to bang heads together.

One cannot, though, forgive Long his air-brushed goodbye: “It was always my intention to step back when we found the right figure to take Countrywide forward.” Come on, the intention was to go after plan A had been approved; you’re going now because it won’t be.

Good news for Tesla, bad news for investors
Good news for Elon Musk: he’s much wealthier, on paper, than he was at the start of last week. Tesla’s stock price has improved by about a third since the electric carmaker was selected for inclusion in the S&P 500, the main US market index, from next month. The company is now worth an astonishing $500bn (£374bn).

Spare a thought, though, for investors in passively managed funds that track the S&P 500. Those funds are obliged to buy Tesla shares at prices that have been artificially inflated by the demand created by index-inclusion. That seems perverse.

Rebalancing effects are inevitable given the popularity of tracker funds in the US and the case for the defence is that funds get a month between announcement and inclusion to adjust portfolios, which is normally long enough to smooth the bumps. But it wasn’t enough time in Tesla’s case because of the company’s sheer size. The system looks silly.