Tesco enjoys record Christmas sales but warns of Brexit ‘teething issues’

Online sales and collections soared as UK tightened lockdowns

Tesco said it had absorbed £810 million in virus-related costs. Reuters

Supermarket giant Tesco has reported record Christmas sales with online demand booming amid coronavirus lockdown restrictions, but it also raised a warning of Brexit “teething” problems.

Total sales jumped 7 per cent on the year to £19.9 billion ($27.2 billion) in the 19 weeks to January 9, Tesco said in a trading update on Thursday.

That period included Britain sliding into ever-tightening lockdown restrictions, the Christmas gift-buying rush and Brexit becoming law.

Britain's biggest retailer said it had experienced some disruption to supplies after the UK left its Brexit transition period on January 1.

"We have seen some limited disruption into the Republic of Ireland and into the north of Ireland, but we're working very closely with government on both sides of the Irish Sea to smooth the flow of product", chief executive Ken Murphy said.

"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," he said.

"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 of product."

Online sales rocketed by more than 80 per cent to add almost £1 billion to total sales, as customers opted for home deliveries and store collection services.

Tesco said it had absorbed £810 million in virus-related costs in 2020 as a result of employee absences, hiring 35,000 temporary staff, online investment, and implementing new health and safety measures.

"Our focus on looking after our customers, including delivering record availability, robust safety measures and great value has enabled us to maintain strong momentum through the Christmas period, outperforming the market every week," Mr Murphy said.

"We delivered a record Christmas across all of our formats and channels.

"We're now supporting 786,000 vulnerable customers with priority access to online slots and, as lockdown measures continue, we'll keep doing everything we can to ensure everyone can safely get the food and essentials they need."