Barclays European Food Retail Equity Research has outlined the potential impact that a Brexit would have on UK market-leader Tesco, in a briefing note.
The UK goes to the polls on 23 June to decide whether or not to leave the European Union, and Barclays said in the note, “If the UK votes to remain in the EU, we do not foresee any significant implications for Tesco or its UK peers.”
On the other hand, “A vote to leave would likely impact the sterling's value against other currencies, although the extent of the possible impact and timeframe are far from clear.
“In general, a weaker sterling would tend to boost food inflation – typically helpful for sentiment on the sector. In Tesco's case, a weaker sterling should also boost the value of its international earnings and assets in sterling.”
Barclays expects Tesco to post a second successive quarter of positive UK like-for-like sales in its Q1 figures, also published on 23 June.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.
