Tesco Finally Says It's in Talks to Stockpile Goods for Brexit
(Bloomberg) -- Tesco Plc has remained quiet on Brexit since the referendum result nearly three years ago, but the U.K.'s biggest retailer has now disclosed it is planning to stockpile in the run-up to the March deadline.
The supermarket has delivered stock-holding and production plans for each of its suppliers by using existing networks and warehousing space. It has offered to help these suppliers hold their stock if they lack the space to do so themselves. This comes a month after Bloomberg reported the big-four U.K. supermarkets were asking their main suppliers to ramp up stock over concerns that half their shelves will be empty if there is a hard or no-deal Brexit.
“We are making contingency plans now that Christmas is behind us,” Chief Executive Officer Dave Lewis said on a call with journalists, after Tesco's sales statement Thursday. “We are working with our suppliers to think through sensible opportunities to improve stock-holding closer to the market.”
Lewis also stressed the importance of a frictionless border for the company's supply chains and said stockpiling is difficult when it comes to fresh food. “We looked at the life cycle and production of product categories that matter most to customers and sat down with all suppliers to discuss their production capability, where they hold stock and if we can help them hold it,” he said.
Marks & Spencer Group Plc also said it's ramping up contingency plans to prepare for a no-deal Brexit, which would have a “significant impact” on its food business. It hasn't yet increased space at its warehousing facilities, but it's reviewing the number of products with long shelf life, CEO Steve Rowe said on a media call Thursday. The company also raised concerns over its ability to stockpile fresh food.
--With assistance from Thomas Buckley.
To contact the reporter on this story: Ellen Milligan in London at emilligan11@bloomberg.net
To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John J. Edwards III, Thomas Mulier
©2019 Bloomberg L.P.
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