Tesco's Dave Lewis: Brexit in October could be far worse than in March

Stockpiling to mitigate no-deal Brexit would be harder ahead of Christmas, Tesco chief executive said.

Tesco: celebrates centenary this year
Tesco: celebrates centenary this year

Tesco’s chief executive, Dave Lewis, has warned that the ability of supermarkets to help smooth a no-deal exit from the European Union would be more limited in October than it was in March, due to a lack of physical space in which to stockpile goods.

As things stand, the UK will leave the EU on 31 October without an exit deal unless it agrees a further extension or parliament revokes Article 50 or approves the deal negotiated by Theresa May.

Although MPs have voted against no deal on several occasions, some candidates in the Conservative leadership race are threatening to revive it as an option. If that happens and the UK fails to put temporary arrangements in place, the flow of food imports into the country could be affected immediately.

Lewis, who was speaking on a call to discuss quarterly results, admitted that the business had been hit by poor weather. He said that while Tesco had stockpiled products ahead of the original Brexit deadline in March, it had not made plans to do so again.

"We did build stocks to the end of March – we’ve sold down that stock," he said. "At this moment in time, we’re not doing anything. As we get closer [to October], we’ll review those plans."

But from a retail point of view, Lewis said, October would be "much more challenging – we’d be coming out of Halloween and building stock for the Christmas peak, so the capacity in the supply chain will be much more challenging. It’s about sheer physical capacity. It’s not just the availability – it’ll be the space."

Lewis reiterated that his biggest concern would be around fresh produce, which cannot be effectively stockpiled.

Tesco’s UK like-for-like sales in the 13 weeks ending 25 May were up 0.4%, but total UK sales were down 0.4% – although Tesco said it had outperformed the market in this period. Stronger growth in Ireland and in the Booker wholesale business meant overall UK and Ireland sales were up 1.3%.


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