Sainsbury’s boss Mike Coupe: ‘You couldn’t choose a worse date’ for Brexit

Coupe warned retailers would have little ability to stockpile products in the manner they did ahead of the postponed March and May Brexit deadlines, at a time when space in the supply chain is dominated by Black Friday and Christmas products.

He cautioned that a potential no-deal Brexit and the sudden halt of trading agreements – which could spark the introduction of tariffs and delays at ports – could make it difficult for retailers to import goods such as toys and technology, creating a “potentially disruptive” Christmas for consumers.

Coupe’s comments came just weeks after Dave Lewis, the boss of Sainsbury’s big-four rival Tesco, voiced similar concerns about the “challenging” timing of Brexit.

Speaking after Sainsbury’s reported a fall in first-quarter sales, Coupe said: “The timing, as in October 31, is bang in the centre of when we are gearing up our supply chains and our stocking for all of the main Christmas events – Black Friday and then the main Christmas trading season.

“You couldn’t choose a worse date.”

He added: “The reality is that a hard-edge, no-deal Brexit with no formal arrangements in place would be very disruptive to the food supply chains that we run in the short term.

“Of course, the European Union also has trading arrangements with other countries from where we also import products. Those supply chains could also be disrupted, including things like toys as an example.

“We are in uncertain, uncharted territory. We’ve already marched up the hill twice, in March and May, so in that sense, we are at least a little bit more practised in some of the actions we would take. But there is no amount of mitigation that would completely overcome the disruption that we’d see in our supply chains.

“In terms of dates [when] you could choose to have a hard Brexit, October 31 is about as bad as it gets.”

Despite a 1.6% drop in like for likes in the 16 weeks to June 29, Coupe insisted Sainsbury’s was doing “lots of good things” to improve the business and hailed improvements in its core grocery performance.

But he added: “The nature of our industry is that there are few – if any – silver bullets. And if you were able to fire them, the opposition catches up relatively quickly.

“It’s very much about getting into the detail, improving the quality of the products that we sell, reducing prices and improving the look and feel and the ambience of our stores by investing appropriately in our supermarket business.”

The grocer has already revamped 84 supermarkets in the first quarter and plans to have improved 200 locations by the end of its first half.