Positive Impact of Covid-19 on TESCO Retail Business

Introduction

In 1919, Jack Cohen established Tesco PLC (Tesco) in London as one of several retail

businesses. Tesco has grown to become the third biggest retailer in the world. Over time,

Tesco branched beyond its original food retailing industry into others, such as clothes and

electronics retailing, banking, insurance, and consumer finance. Despite having its main

office in the UK, the firm has swiftly grown into more than 15 other nations across the globe.

This essay will discuss the drastic change in the consumer purchasing behaviour by

explaining underlying causes in light of literature review. Moreover, it will underpin the

statistical approach to explain the increase in online shopping from TESCO during pandemic.

Since the Covid-19 epidemic that started in the early 2020s directly harmed the global

economy, it has become the newest chapter in the history of human civilisation. As a result of

the worldwide spread of the covid-19 epidemic, strict regulations were enacted, such as a

one-meter social distance requirement and an area lockdown, both of which had significant

effects on the retail sector (Rumagit et al., 2022). Eventually, Tesco will join the ranks of

other retailers. It has been speculated by Jung and Jeon (2021) that "the pandemic has

adversely damaged the retail sectors, including consumer behaviour, customer needs, retail

store, and manufacturing and logistical services accessibility" (Benker, 2020). Because of

Covid-19, individuals stayed inside more and avoided face-to-face interactions. Due to the

necessity to limit direct interpersonal contact during the epidemic, this condition pushes

individuals to use internet channels for various activities. As a result, during the COVID-19

outbreak, online sales skyrocketed.

Covid-19 impacts innovations in retail because of its far-reaching effects. Covid-19's

success in retail may be directly attributed to the quality of the product. Retailers' ability to
think outside the box has been boosted by the epidemic, as has been shown (Benker, 2020).

Throughout the epidemic, Tesco did its utmost to remain open and meet the needs of its

consumers. In a statement, Tesco CEO Dave Lewis praised the company's employees, saying,

"Their altruistic efforts, combined with our natural strategic advantages in retail and online,

help reaffirm that everyone can receive the food they need in a secure setting." Tesco's staff

have increased their online customer care capacity in only five weeks, and the company has

implemented social distancing measures across its shops to ensure that all customers feel

comfortable and protected while they buy.

Lockdown expansion with improved delivery capacity during the first lockdown last

spring reportedly contributed to a 22% rise in Tesco's online sales, as Rigby (2021) reported.

According to Julia Herzberg, Tesco's social media manager, the company has benefited from

consumers' shift to online shopping in the middle of the epidemic (Panwar, Pinkse and De

Marchi, 2022). Tesco's online delivery capacity has been raised to 1.5 million slots each

week, and online sales have climbed by approximately 70% year-over-year since August

2020.

The satisfaction of a company's consumers is measured by how happy those

customers are with the company's goods and services. Customers are likelier to stick with

your business because of it (Panwar, Pinkse and De Marchi, 2022). Consumers' actions might

light up the reasons for a product's success or failure in sales. During the Covid-19, people

cannot leave their homes to shop, forcing them to rely on online retailers to provide their

basic needs. Due to the outbreak, many individuals lost their jobs and income, which knocked

down their ability to spend money.

Today, Tesco demonstrated how it rapidly migrated its UK operations online in

response to a surge in demand for home delivery during the Covid-19 lockdown. Over the
first three months of the fiscal year, e-commerce sales in the UK increased from 9 per cent to

16 per cent of total sales (Rigby, 2020). The biggest supermarket in the UK, which engaged

47,000 temporary workers during the lockdown, believes it would spend almost £840m this

year adapting to Covid-secure shopping.

Online sales at Tesco, a Leading retailer according to RXUK Top500 study, increased

by 48.5% during the quarter and by almost 100% at the end of May compared to the same

period last year. It has doubled its online storage capacity in response. Previously, it only had

600,000 open delivery slots; now, it has almost 1.3 million. 12.6 million Orders were sent

throughout the quarter, with priority given to 590,000 vulnerable people (Rigby, 2020). The

store has also increased its emphasis on click and collect, which currently accounts for nearly

a quarter of all online purchases. Online sales in the UK now make up 16% of the company's

overall revenue, up from 9% in the previous year.

References

Benker, B. (2020). Stockpiling as resilience: Defending and contextualising extra food

procurement during lockdown. Appetite, 156, p.104981.
doi:10.1016/j.appet.2020.104981.

Panwar, R., Pinkse, J. and De Marchi, V. (2022). The Future of Global Supply Chains in a
Post-COVID-19 World. California Management Review, 64(2), p.000812562110733.
doi:10.1177/00081256211073355.

Rumagit, M., Sharma, A., Angelle, A., Mui, D., Kee, H., Ke, A., Nik, C., Bin Bachotan, A.
and Bian, S. (2022). Factors Influencing Consumer Buying Behavior in Uniqlo Retail
Store. International Journal of Accounting & Finance in Asia Pasific (IJAFAP),
[online] 5(1), pp.39–52. doi:10.32535/ijafap.v5i1.141.

Rigby (2020). Tesco shows how it adapted as shoppers moved online fast during the Covid-
19 lockdown – and counts the costs of change. [online] Internet Retailing. Available
at: https://internetretailing.net/covid-19/tesco-shows-how-it-adapted-as-shoppers-
moved-online-fast-during-the-covid-19-lockdown-and-counts-the-costs-of-change-
21616/.