Tesco planning to stockpile food over no-deal Brexit fears, supermarket admits
Tesco has warned that opportunities to stockpile food in order to prepare for a no-deal Brexit are “very, very limited”.
Chief executive Dave Lewis said that ensuring supplies of food remain uninterrupted was the “single biggest challenge” facing supermarkets as the UK prepares to leave the EU.
Despite the urgent need to plan for Brexit, Mr Lewis said Britain’s biggest retailer was still unable to fully prepare until the outcome of negotiations becomes clearer. The supermarket chain is in “wait and see mode”, he said.
“The biggest single challenge will be in a no-deal scenario and what happens with fresh food.
“The possibility of stockpiling fresh food is very, very limited,” Mr Lewis said, adding that supplies of dry food could be built up.
He said plans to ensure fresh food imports are not held up is “where all our attention will be in the lead up (to Brexit)”.
The comments came as Tesco unveiled rising half-year sales and profits, boosted by its takeover of wholesaler Booker.
Tesco delivered its 11th quarter in a row of rising like-for-like sales in the UK and Ireland while pre-tax profits for the six months to 25 August rose to £564m, 2 per cent higher than the same period last year. Underlying operating profits were up 24.4 per cent to £933m in the first half.
Despite the results, Tesco’s share price slumped almost 9 per cent on Wednesday as disappointing performance left earnings short of expectations.
Aldi revealed on Monday that it has considered stockpiling food as part of its preparations for Brexit.
But chief executive Giles Hurley added that Aldi’s increased fresh food range would make this more difficult.
“While I think storage of additional stock is worth considering, based on storage and shelf life that would be very challenging,” he said.
Brexit Secretary Dominic Raab said in July that the government is making plans to secure food supply in the event of a no-deal Brexit.
But he said it was “wrong to describe it as the Government doing the stockpiling”, indicating that industry would need to take the lead.