Tesco’s (LON:TSCO) planning for the new Brexit deadline is ‘more difficult’ because the supply network will be full of Christmas stock, the grocer’s chief executive has told the BBC. The UK is currently due to leave the European Union at the end of October.
Tesco’s share price was little changed in the previous session, inching 0.13 percent to close at 231.70p. The shares underperformed the broader UK market, with the benchmark FTSE 100 index gaining 61.69 points to end trading 0.82 percent higher at 7,559.19.
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More difficult planning
Tesco’s chief executive Dave Lewis told the BBC that the new Brexit deadline of the end of October meant that there would be ‘less capacity’ for stockpiling longer-life items. He explained that while Britain’s biggest supermarket had bought extra stock of long-life items in preparation for the previous deadline of 29 March, it would be harder to make similar preparations this time round.
“We’ll do whatever is practical depending on how things develop between now and then,” he pointed out, adding that the challenge would “always be those things which are shorter life – fresh produce”. Lewis further noted that a no-deal Brexit could mean tariffs and delays at the border that interrupt supplies of some food.
“Empty shelves depends on what no-deal means. If there’s a problem at the border, if there’s a problem with tariffs then there could be interruption,” he told the BBC, adding, however, that “if as part of no deal there is no tariff, there is no problem”.
Analyst ratings update
HSBC reaffirmed Britain’s biggest grocer as a ‘buy’ last week, with a target on the Tesco share price of 275p. According to MarketBeat, the blue-chip supermarket currently boasts a consensus ‘buy’ rating and an average valuation of 278.80p.
In other Tesco news, the latest Kantar Worldpanel data revealed that the grocer’s sales in Ireland had climbed three percent in the 12 weeks to June 16.