Tesco (LON:TSCO) is set to take action after Christmas to fend off food shortages unless the government has cut a Brexit deal, the Guardian reports. The news came as Britain’s biggest grocer updated investors on its interim performance this week, posting a rise in profits, which, however, fell short of analyst forecasts.
Tesco’s share price has climbed higher in London in today’s session, having gained 0.65 percent to 214.79p as of 14:49 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 1.09 percent in the red at 7,337.20 points. The group’s shares have added nearly 15 percent to their value over the past year, as compared with about a 2.2-percent drop in the Footsie.
Tesco could stockpile
The Guardian reported this week that Tesco’s chief executive Dave Lewis had said that the ‘biggest single challenge’ would be the impact of a no-deal exit on deliveries of fresh food from the continent.
“The possibility of stockpiling fresh food is very, very limited,” he pointed out, adding that Britain’s biggest supermarket was discussing contingency plans with its suppliers and “if it came to it, we could take stockpiling of dry goods”. Lewis, however, noted that plans would not ‘become real’ until after the busy Christmas trading period.
“It really is still wait and see,” he said.
Analyst ratings update
The 16 analysts offering 12-month price targets for Tesco for the Financial Times have a median target of 277.50p on the shares, with a high estimate of 300.00p and a low estimate of 200.00p. As of October 4, the consensus forecast amongst 21 polled investment analysts covering the blue-chip grocer has it that the company will outperform the market.