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How coronavirus will impact supermarkets

Supermarkets are facing an unprecedented spike in demand
How coronavirus will impact supermarkets

Your local Tesco (TSCO) outlet is currently a scene of wartime anarchy, ransacked of toilet roll, hygiene products and store-cupboard goods. Covid-19 has had a seismic impact on the operations of supermarket groups, prompting Wm Morrison (MRW) to cancel plans to award a special final dividend in its results this week as it looks to conserve firepower for the months ahead.

We are waiting to see how the situation will be reflected in other supermarket groups’ financial performance. For now, we know that the early throes of coronavirus panic-buying did not translate into a February sales surge for all of the large grocers. Sainsbury’s (SBRY) alone recorded a sales boost, according to research house Kantar, posting a 0.3 per cent year-on-year increase – which returned the group to growth for the first time since October 2019. 

The outbreak also poses risks to supermarkets, which may struggle to manage their workforces and inventories. Even a small labour shortage will likely create gaps in the supply chain, the effect of which will be compounded by stampeding customers. 

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