British economy hit by Brexit

Brexit Illustration: Evgenyi Gromo
The British economy is already suffering due to the Brexit uncertainty. Top executives in the grocery industry warns that the uncertainty may evolve into chaos. Illustration: Evgenyi Gromov
By Reidar Molthe

16 January 2019 09:31

British economy hit by Brexit

Negotiations between the EU and the UK on Brexit are confusing. However, there is no doubt that the uncertain situation is damaging the UK economy. Now several top executives in the grocery industry warn that the uncertainty about Brexit can create chaos.

Britain’s economy slowed after the 2016 Brexit referendum and looks to have lost more momentum in late 2018 as Prime Minister Theresa May struggled to get UK Parliament’s support for her plan for a smooth exit from the European Union in less than three months.

The British Retail Consortium (BRC) said its members reported zero year-on-year total sales growth in December, the worst performance for the month since 2008.

Tesco warns about Brexit

– Britain faces a fresh food bottleneck if it drops out of the EU without a deal, the country’s largest supermarket group, Tesco,  warned last Thursday, echoing comments from its biggest rival, Sainsbury’s, the previous day.

As the country counts down to Brexit while politicians remain deadlocked over how best to oversee its departure on March 29, Tesco said it had increased stockholdings of ambient foods such as bottles, packets and tins and made clear plans for each product category.

Last Wednesday Sainsbury’s, which imports about 30 percent of its food from continental Europe, issued a similar warning.  “It will be hugely disruptive if there was a no-deal Brexit for the supply chains that we operate...,” its Chief Executive Mike Coupe said.

Analysts pointed out that in 2018 it only took a few days of heavy snow disruption when the “Beast from the East” hit Britain before supermarkets got into (big) problems supplying their shelves.

Sources: Retailanalytics, Reuters, Bloomberg, Sainsbury’s, Tesco, Morrisons.

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