Business

Supermarket bosses warn October Brexit could hit Christmas shoppers

Sainsbury's has seen like-for-like sales continue to tumble over the past four months, as pressure continues to weigh on boss Mike Coupe. The chief executive has warned that a no-deal scenario Brexit would be very disruptive for the retail sector

BOSSES of the UK's three biggest supermarkets have warned the next Prime Minister that setting up a potential no-deal Brexit for the end of October could hit shoppers' Christmas celebrations.

Chief executives from Tesco, Sainsbury's and Asda, which account for more than half of all food sales in the country, said the October 31 deadline is particularly problematic because that is the same time they start increasing deliveries of extra festive products.

Mike Coupe, head of Sainsbury's - which reported a like-for-like sales decline by 1.6 per cent in the 16 weeks to June 29 - said the date is "about as bad as it gets".

He added: "A no-deal scenario would be very disruptive to us, and I think the timing of it means it would be potentially disruptive for people's Christmases."

He warned that toys and electrical goods coming from outside of Europe could be particularly affected by disruption at UK ports.

Roger Burnley, chief executive of Asda, said he does not want to see fresh food going to waste in the event of border checks.

He said: "Whatever the outcome, we need a friction-free border to get our food in quickly and our fresh food can get through to our customers as quickly as it does today.

"If you're choosing a time for a dramatic change [to the rules], you wouldn't be choosing October, for sure.

"We're all heavily into stock building at that time. Nonetheless we'll do our best for customers to make it as seamless as possible whatever the outcome at that time."

The boss added: "Fresh food from Europe is the area of biggest concern and we need to make sure it's friction free and can come across the channel as quickly and as seamlessly as it does today, and that's the key outcome for us.

"We don't want lorries with fresh food sitting in ports rotting."

Asda said it has done considerable research beforehand when the original Brexit deadline was in March this year, and found that customers are expected to stockpile essentials such as toilet roll.

Over at Tesco, chief executive Dave Lewis told the BBC: "In March, for long-life things we did take some stock so that, depending on what the outcome was, we could help our customers through that time of turbulence.

"It will be more difficult to do that in October, that's for sure, because all the network will be full of things getting ready for Christmas so there will be less capacity."

Supermarkets naturally build up stock ahead of Christmas and may be short of much-needed extra warehouse space if the UK leaves the EU without a deal.

Both Conservative leadership candidates Boris Johnson and Jeremy Hunt have kept open the possibility of a no-deal scenario, although they have both stated that securing a deal would be preferential.

Mr Johnson has said the UK will leave the EU by October 31, regardless of whether a deal has been signed, whilst Mr Hunt said he would make a decision in September.

The British Retail Consortium has also weighed in, saying on Wednesday that an October 31 deadline would come at the "worst possible time for retail".

Chief executive Helen Dickinson said the new deadline coincides with the "height of preparations for Christmas and Black Friday, which are peak trading periods, threatening to cause disruption for consumers and businesses, and making further stockpiling of goods almost impossible".

"It is vital that the next Prime Minister reaches a deal with the EU and avoids the cliff edge," she said.

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