Brexit casts cloud over Tesco’s festive feat

Tesco became the latest supermarket to serve up a sales feast over christmas, but problems on the island of Ireland cast a shadow over the results.

As it posted an 8.1pc rise in UK sales over the festive period, the supermarket group revealed it has had trouble delivering fresh foods, particularly meat, to Northern Ireland and the Republic of Ireland after the transition period with the european Union ended on December 31.

Problems surround paperwork, with meats requiring the correct veterinary sign off in order to be transported through the borders.

chief executive Ken Murphy said: ‘We’re working very closely with government on both sides of the Irish sea to smooth the flow of product.

‘Ready meals are the ones that are most heavily impacted because they typically operate on an eight-day shelf life so if there’s a delay at port of four hours, that’s a day of shelf-life lost effectively.’

Tesco is one of the largest food retailers in Ireland, making up 22pc of the market. Irish sales account for 5pc of the business’s total group sales.

Murphy, born and educated in cork in the republic, added: ‘We have a big business that we want to nurture and keep. I can tell you with 100pc confidence that we are committed to our customers in Ireland and we will find a solution for them.’

He also said there had been ‘ teething problems’ with supply flows from continental europe to the UK.

‘Inevitably there are bedding-in issues, teething issues, that you would expect with any new process that’s been set up at relatively short notice.

‘We’re working our way through those and we would hope over the coming weeks and months that we will end up with a much smoother flow,’ he added.

Tesco followed supermarket rivals in reporting buoyant christmas trading, driven higher by sales of champagne and mince pies. It also reported an increase in its low or no-alcohol products and sales of its vegan Plant chef range, underlining the growing trend of health conscious shoppers.

The FTSE 100 grocer said UK sales rose 6.7pc in the 13 weeks to November 28 and 8.1pc in the following six weeks to January 9. Business in the UK was boosted by a 14pc rise in sales of its ‘Finest’ range.

over the 19-week period, internet trading soared by more than 80pc, handing it an extra £1bn of sales. And it had given all front-line staff a 10pc bonus over christmas. Rivals sainsbury’s and Morrisons last week reported similar sales surges.

‘This was our sixth consecutive christmas of growth and a record performance,’ Murphy said.