Tesco’s new chief executive has told Sky News the UK’s largest retailer still lacks clarity from the government on the movement of goods following the end of the Brexit transition period.
In an interview with Ian King Live, Ken Murphy said the logistics issue was “the biggest challenge” facing the company at the year’s end and he could not rule out the prospect of prices increases to reflect any additional cost increases as a result.
He made his remarks as talks continue to secure a free trade agreement between the UK and EU – beginning on 1 January – with the change in rules primed to cause chaos in any event, according to critics of the government.
Sky News revealed last month how hauliers had accused ministers of secrecy, describing communication as a “complete shambles”, as border customs’ declarations loom.
All this as the global economy reels from the effects of the coronavirus crisis.
Mr Murphy, who succeeded Dave Lewis two months ago, said its decision on Tuesday to repay £585m in business rates relief was right for the Tesco brand and not intended as a challenge to its rivals – who have now mostly followed suit.
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Tesco boss seeks rates shake-up after £585bn repayment
He used the interview to agree that the business rates system – a tax on physical commercial property – was not fit for purpose, describing how Tesco’s rates bill had risen by 80% over the past decade while competition from online in particular had dented sales.
He said it amounted to a “massive penalisation” of retail, especially in more deprived areas where the sector is so important to employment, and an online sales tax would help level the playing field.
Mr Murphy indicated that serving customers was at the top of the agenda in the run-up to Christmas, but question marks needed to be removed relating to the weeks that followed.
“The biggest challenge we face really is the movement of product between borders, the movement of product between Great Britain and Northern Ireland and of course between mainland Europe and the UK.
“That is the one area where we really would urge the government to give us some clarity and to allow us to prepare even better for the end of December,” he said.