“As bad as it gets” – Grocery giants warn on Brexit no-deal

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Grocery Brexit
// UK’s 3 biggest grocers warn that an October no-deal Brexit would be “as bad as it gets” as it could disrupt Christmas trading
// Sainsbury’s CEO Mike Coupe says toys & electrical goods could be affected by disruption at UK ports
// Asda CEO Roger Burnley highlighted the risk of “fresh food sitting in ports rotting”
// Tesco CEO Dave Lewis says it’d be more difficult to stockpile as warehouses would already be full for Christmas anyway

The UK’s three biggest grocers have issued a warning to the next Prime Minister that a no-deal Brexit would be “as bad as it gets” and could disrupt people’s Christmases.

The bosses at Sainsbury’s, Tesco and Asda – which account for more than half of all food sales in the country – said the timing of the delayed October 31 deadline is problematic because that is the same time they start increasing deliveries of extra festive products.

The grocery giants had already commenced stockpiling in preparation of Brexit when its original deadline was set for March, but because supermarkets usually build up stock ahead of Christmas anyway, they may be short of much-needed extra warehouse space if the UK leaves the EU without a deal.

Sainsbury’s chief executive Mike Coupe said toys and electrical goods could be affected by disruption at UK ports, and that the October deadline is “about as bad as it gets”.

“A no-deal scenario would be very disruptive to us, and I think the timing of it means it would be potentially disruptive to people’s Christmases,” he said.

Asda chief executive Roger Burnley highlighted the risk of “fresh food sitting in ports rotting” in the event of border checks.

“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,” he told PA.

“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.”

Meanwhile, Tesco chief executive Dave Lewis said it would be more difficult to stockpile ahead of a no-deal in October as warehouses would already be full for Christmas anyway.

“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,” he told the BBC.

“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.”

The warnings come as Tory leadership candidates Boris Johnson and Jeremy Hunt keep open the possibility of a no-deal Brexit scenario, although both say they would prefer to leave with a deal.

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

The BRC 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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