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Fortnum & Mason plans to step up investment in its European business, as the UK and EU’s attempts to reset trading relations raise hopes that the upmarket retailer can rebuild international sales lost as a result of Brexit.

Chief executive Tom Athron told the FT that a proposed wide-ranging deal between London and Brussels “would have the significant benefit of opening up that market more meaningfully to British businesses again”.

The retailer’s hampers, teas and jams are popular with UK expats and international buyers looking for quintessentially British groceries. But Fortnum’s decided to stop selling to customers in the bloc because of the additional export costs and bureaucracy resulting from Brexit, hitting about 8 per cent of its revenue.

Sir Keir Starmer’s government is working on a wide-ranging deal with EU counterparts that would remove red tape for British food and drink exporters.

“The mood music is positive and that’s giving me the confidence to invest in our EU business,” Athron said. “I sense a degree of pragmatism in that relationship, which is very encouraging.”

The FT reported at the weekend that the EU was demanding the inclusion of a “Farage clause” that would entail Britain paying significant financial compensation if a future government quits a revised deal governing food and drink exports.

Fortnum’s, which holds two Royal Warrants from King Charles and Queen Camilla, set up a distribution centre in Belgium in 2023 to restart deliveries to customers on the continent. “We’re getting some real confidence that the demand is still there,” Athron added.

The 319-year-old retailer said it would also focus on growing its online business in the US as the threat of tariffs subsides. Its sales were dented in the first half of the year by President Donald Trump’s trade war, which imposed stricter country of origin rules and removed the “de minimis” exemption for parcels worth less than $800. The US removed tariffs on some agricultural products in November.

“I think the Americans realised that . . . there was no tea industry in America to protect,” said Athron. “There are 159mn people in America who drink tea every day and they all saw the price of their cup of tea go up 50 per cent.”

Growth in online sales helped drive a 16 per cent increase in revenue at Fortnum’s in the five weeks to December 24. Like-for-like sales in stores rose 7 per cent, as shoppers were drawn to its flagship store on London’s Piccadilly to view its new Double Helix staircase.

In the year to July, Fortnum’s reported a 5 per cent rise in revenues to £239mn, according to results filed at Companies House on Tuesday. Pre-tax profits were £15mn.