Tesco has revealed that its sales rose 30% in the first few weeks of the coronavirus crisis, in light of increased stockpiling and panic buying across the country.
The surge in sales has now stabilised, however, and the group has reported that normal sales volumes are now being experienced.
In light of the crisis, the group has also increased its capacity on Grocery Home Shopping by more than 20%, and will continue to increase this. It warned that there was “simply not enough capacity” to supply the whole market, however.
The group also warned that in light of the crisis, the estimated impact on its retail cost lines would be between a loss of £650m and £925m, including significant cost increases in payroll, distribution and store expenses.
The full financial impact of the virus will therefore be “impossible to predict”, according to Tesco, and it is therefore “not prudent” for the group to provide financial guidance for 2020/21.
Tesco now predicts that if customer behaviour were to “return to normal” by August, additional cost headwinds incurred in its retail operations would be “largely offset” by the benefits of food volume increases, twelve months’ business rates relief in the UK and prudent operations management.
Dave Lewis, CEO of Tesco, said: “Covid-19 has shown how critical the food supply chain is to the UK and I’m very proud of the way Tesco, as indeed the whole UK food industry, has stepped forward.
“In this time of crisis we have focused on four things; food for all, safety for everyone, supporting our colleagues and supporting our communities. Initial panic buying has subsided and service levels are returning to normal.”
He added: “There are significant extra costs in feeding the nation at the moment but these are partially offset by the UK Business rates relief. Tesco is a business that rises to a challenge and this will be no different.
“I would like to thank colleagues for their unbelievable commitment and customers for their help and understanding. Together, we can do this.”