NOTE: This content is old - Published: Friday, Aug 9th, 2019.
The managing director of Deeside based Iceland says he expects to see “short term” gaps on shelves across the supermarket chains stores following the “turbulence” of Brexit.
In an interview broadcast by BBC Radio 4 this morning, Richard Walker said a no-deal Brexit would be damaging to Iceland’s fresh food supply lines, which account for a third of the supermarket chains sales.
The Iceland MD also said a no-deal scenario will “hit the most vulnerable communities the worst.”
There’s been a distinct lack of clarity and guidance on Brexit for retailers from the government and the industry is “playing blind.” He said.
Despite voting to leave the EU himself, Richard Walker now wants a second referendum as a “way out of the country sleepwalking over a no-deal cliff edge.”
With the possibility of a no-deal Brexit looming the Iceland MD fears products like bacon could be missing from the shelves of his stores or prices hiked through tariffs.
He said: “I love the bacon sandwich in the morning, as do so many of our customers, but almost the entirety of the UK is domestic bacon comes from Denmark.
I don’t know whether there’s going to be friction at the border, there will be tariffs on the bacon, I’m just not quite sure how that will play out. No doubt in the short term, there will be a bit of turbulence.
The big unknown element is short term fluctuations in the pound.
If there are large shocks in currency and tariffs then the whole market is going to have to look at some of the prices on food.”
Asked if Iceland was stockpiling ahead of the UK leaving the EU on October 31, he said:
“It’s a bit of a misdirection, companies can’t really stockpile for more than a week or two they just don’t have the room on the balance sheet or indeed in warehouses.
The retail industry has been pointing out that a Halloween Brexit is the worst of all possible timings because the warehouses are full anyway.
We’re pretty much at maximum capacity in the run-up to Christmas as retailer starts stock build for our peak trading time.”
The MD who took over the reins of the business from his father – Iceland founder Sir Malcolm Walker – says, “I’ve argued for clarity and for a way out of this [Brexit] which would be via a second referendum.
And I say that as someone who voted to leave… we’re three years on [from the referendum vote] we’ve all learned so much more and we are paralysed by fear…. we’re sleepwalking over a no-deal cliff edge.”
Asked if the government was doing enough to support supermarkets, Mr Walker said, “I do now detect a sense of fatalism that is coming into the market.
There was a lot of goodwill in March, a lot of retailers prepared quite thoroughly for a no-deal scenario through stockpiling and also hedging currency movements and they got financially burned by it.
I think the kind of financial will from the retail industry to thoroughly prepare this time has gone.
There is a sense of fatalism… I don’t see why we should take the financial burden for other people’s political games.”