Sainsbury’s PLC (LON:SBRY) warned today that gaps might start to appear on supermarket shelves within days due to the ban of Freight imposed by France today.
The French decision has already seen queues of lorries stuck at Dover, though the authorities in both countries said they were hopeful a solution might be found within hours.
France has responded to a surge of coronavirus infections in the south of England caused by a new variant of COVID-19 that spreads far quicker than the original strain, scientists said.
That new strain had already sparked a new Tier-4 lockdown in the south-east yesterday, which meant all non-essential shops had to shut.
Frasers Group PLC (LON:FRS) was first to warn today that it was ripping up its previous guidance of a healthy profit increase this year.
The Sports Direct and Evans Cycles group owner said all of its shops in the south-east has now closed and as this is normally the busiest part of its trading year.it would not meet the previous guidance.
Sainsbury’s added that while it had plenty of food in stock, certain very perishable items such as lettuce, salad leaves and cauliflowers that come from the Continent might soon run short if ports did not reopen soon.
Joshua Hardie, the CBI’s deputy director-general tweeted: “Lockdowns + brexit + additional border blocks is an unmanageable equation,” and called for the ban to lifted urgently.
Though lorries in France can still travel across the Channel, the concern that drivers might not be able to get back might stop them doing so, said the CBI.
Shares in retailers were already under pressure due to the new restrictions imposed at the weekend and even before the news of the French ban.
Russ Mould, investment director, at AJ Bell, said: “A lot of businesses would have been prepared for a potential nationwide lockdown in January as the price for the UK having a small window of relaxed rules at Christmas.
“To now have tight rules in the period just before and after Christmas completely changes the outlook. Disruption has come at the worst time imaginable for retailers as those final few days pre-Christmas normally result in big sales.
Many shops will also be choc-a-bloc with Christmas stock and unable to open before the New Year.
Meanwhile, the latest CBI distributive trades survey pointed to a bounce-back when shops were allowed to open on 2 December, but the mood was subdued even before the latest Tier-4 shock, economists said.
“Retailers were already downbeat about sales prospects in January even before the latest tightening of restrictions, which includes non-essential retailers closing in Tier 4 regions,” said Howard Archer, chief economic advisor to the EY Item Club.
“A balance of -33% expected retail sales volumes to be up year-on-year in January, primarily due to concerns that a likely labour market decline will affect consumer spending.”
Shares in Frasers dropped 10.7% to 424.4p, Next fell 3.75% to 6,530p and Marks & Spencer PLC (LON:MKS) 6% to 125.7p.
