Sainsbury's to go ahead with Home Retail deal despite Brexit

Since the UK voted to leave the European Union on the 24 June, the pound has plummeted to 31-year record lows and economists have predicted that the UK could fall into a recession.

However, Sainsbury’s chief executive Mike Coupe maintains that Brexit has not changed the rationale for the deal, worth around about £1.4bn.

"We remain absolutely convinced by the strategic rationale of the deal and we think it will strengthen our business ...We remain committed to making the deal happen. Clearly the economic conditions have changed and we have to recognise that in the documentation," he said after the supermarket published details of the acquisition.

Coupe also warned that the country could talk its way into a recession since the referendum result.

"There is a slight danger that we talk our way into an economic downturn as well."

The deal made in April could make Sainsbury’s the biggest non-food retailer in the country. It is being assessed by the competition regulator and they could reach a decision by 25 July to see if they need to open a full investigation.

On Monday the supermarket also said it is to close its Netto stores after ending a joint venture with Danish retailer Dansk Supermarket due to the stores needing swift expansion and investment. It was thought the venture would rival German discount supermarkets Aldi and Lidl.

Sainsbury’s said it would write down the £20m investment to zero and it is expected to cost about £10m to close the sites.

Over the last three months shares in Sainsbury’s have fallen 19%, which have reduced the value of deal.

Shares in Sainsbury’s fell 2.99% to 224p at 1634 BST.