Tesco has increased online capacity by 103 per cent, says chief executive

Published by Scott Challinor on April 28th 2020, 11:11am

Tesco chief executive Dave Lewis has said that the retailer has successfully been able to provide over one million online shopping delivery slots for the first time, having increased its online capacity by 103 per cent within weeks.

Such growth would normally take years to accomplish, with only seven per cent of all groceries having been purchased online prior to the Covid-19 pandemic.

Lewis is expecting Tesco to make room for a further 200,000 online delivery slots within the next ten days.

He said: "We're trying to help as many people as we can. And the single biggest thing has been the change in online shopping”.

"The issue that we have is that when the government talks about vulnerable customers, it has very specific guidelines and they had about 400,000 that they wanted the retail industry to help. They gave us 350,000 of those names and we got to 260,000.

"We will want to do more, but there's still more demand than we're able to supply.”

The Tesco boss also highlighted that people’s shopping habits had begun to alter during the crisis to comply with social distancing, with more people making one weekly trip to Tesco for shopping, as opposed to more regular smaller trips. This coincided with a corresponding double in size of the average shopping basket.

Lewis added that number of purchases in Tesco supermarkets over April had fallen by almost 50 per cent, yet in the 12 weeks to April 19, customers have been spending 7.2 per cent more at Tesco.

He said: "People are shopping once a week, a little like they did 10 or 15 years ago, rather than two, three or four times a week that was happening before the crisis."

Lewis also said that seven weeks’ worth of Tesco sales had come about in a matter of days during the initial surge in panic buying, but that the food supply was “now back in good shape” despite a shortage of flour.

Despite the strain that the pandemic has put on the food supply chain, Lewis believes that it has coped well, but hoped that it would encourage customers to think about their purchasing habits and the government to consider its food strategy in future.

Lewis said: "I think the food chain has done really very well. Two weeks after such a big demand spike everything did recover, so there is resilience.

"I think what this crisis has shown is the importance of food retail. I think in the past, perhaps, a little bit we may have taken that for granted. So, I hope that as a nation, we'll think carefully about food, food strategy and distribution."

Lewis also paid tribute to Tesco staff and customers who have adapted to new social distancing rules, including 45,000 temporary workers that the supermarket has recruited to help cope with staff shortages amid the increase in demand.

Some 51,000 Tesco staff have been absent in recent weeks, having had to go into self-isolation.

He said: "I've been really quite amazed how well 99 per cent of our customers have adapted to the changes in stores.

"But we have to recognise that until the advice of the government changes, then we need to maintain social distance. So, we will, for the foreseeable future have to keep those measures in place.

"I think what was really quite humbling was the willingness of people to come and work in a supermarket and help us feed the nation.”

Market researcher Kantar has also reported that the period covering the 12 weeks to April 19 has yielded a record low in the number of trips being made to UK supermarkets overall, while average basket sizes hit “their highest levels ever”.

Meanwhile, online sales now make-up 10.2 per cent of the overall grocery market.

Kantar said: "Grocery sales were £524 million higher in the past four weeks than they were in April 2019, as British consumers adapted to life under lockdown.

"On average, households shopped only 14 times for groceries over the past month, a record low and down from 17 in more normal times.

"A drop in frequency was matched by a corresponding uplift in the amount spent on each trip to £26.02 - easily the highest figure ever recorded by Kantar and £7 greater than last year."

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Authored By

Scott Challinor
Business Editor
April 28th 2020, 11:11am

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