Tesco sales increase by 30% as customers stockpiled before coronavirus lockdown

Tesco reported a 30% increase in sales in the first few weeks of the coronavirus outbreak as shoppers stockpiled, but the supermarket chain warned the Covid-19 crisis could lead to £1bn of extra costs.

Britain's biggest supermarket said "significant panic buying cleared the supply chain of certain items" but this has now stabilised and normal sales have resumed.

Tesco said 10% of panic buying was by more affluent customers in the south-east, in particular in London.

The products with the biggest uplift in sales, were tinned tomatoes, baked beans, toilet roll, pasta and liquid soap.

Dave Lewis, the chief executive, said: “Initial panic buying has subsided and service levels are returning to normal.

“There are significant extra costs in feeding the nation at the moment but these are partially offset by the UK Business rates relief.”

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However the coronavirus crisis has led to additional costs of anywhere between £650m and £925m for the supermarket chain.

Tesco said there have been “significant cost increases in payroll, distribution and store expenses.”

More than 45,000 workers were recruited over the past two weeks to deal with the extra demand and cover staff sickness.

About 50,000 of Tesco’s 320,000 UK and Ireland employees are off work self-isolating or ill on full pay.

The supermarket chain is not paying workers using the government’s wage support scheme.

While workers are being paid a 10% bonus on the hourly rate and the colleague discount has been increased to 15% for a month.

A restriction of three items per customer on every item has now been removed for the majority of products.

Tesco is also working to construct a NHS Nightingale Hospital pop-up store at the NEC in Birmingham.

Elsewhere Costcutter has built 20 pop-up stores in NHS hospitals to serve doctors and nurses who are unable to get to the shops.

It said the new shops will fill units left by the temporary closure of some retail spaces across the hospital sites.

The new pop-up stores will provide NHS key workers with access to everyday essentials such as bread and milk, bosses added.

M&S said they have "further increased" their hygiene measures and are now cleaning trolleys and baskets every hour.

While Morrisons and Deliveroo are joining up to allow customers to order from 70 essential items for on-demand delivery.

The Morrisons-Deliveroo partnership is for families and vulnerable people self-isolating at home during the Covid-19 crisis.

Customers will be able to order from a list of 70 items, including British meat, fruit and veg and store cupboard essentials.

Morrisons said: “From today, a new service will allow customers to order from a range of essentials delivered to their door, on-demand, by a Deliveroo rider in as little as under 30 minutes.”