TSCDY Tesco PLC (PK)

By Jaewon Kang and Saabira Chaudhuri 

Supermarkets are rationing grocery-store staples and trying to restock more quickly to deal with surging demand, while planning new ways to feed a rising number of self-isolating consumers as coronavirus spreads across the U.S. and Europe.

The move to limit purchases of sought-after items comes despite some retailers stocking up on staples in anticipation of a rush. As the epidemic worsens, grocers are exploring redeploying workers, curbing stores' operating hours and tapping the military and volunteers to deliver food.

Kroger Co. has limited the number of sanitizing, cold and flu products to five each per order in stores and online, after seeing a surge in demand for them in recent weeks.

"All of our teams, our stores, our supply-chain team, our procurement folks are incredibly focused on making sure that they stay in stock on those critical items," Chief Executive Rodney McMullen said during the company's earnings call last week.

The nation's largest supermarket chain, with more than 2,700 stores, has also stopped offering product samples to minimize contact between consumers and store workers. Other virus measures include suspending air travel and recommending that internal and supplier meetings take place virtually.

Publix Super Markets Inc. has started limiting purchases of products including bleach, eating utensils, facial tissue, rubbing alcohol and other sanitizing products to two per customer. The chain, which has more than 1,200 stores in the Southeast, has also suspended sampling and demonstrations.

Albertsons Cos., which owns the Safeway, Jewel-Osco and Vons chains, said many of its stores are capping the number of high-demand items shoppers can buy. The rationing is primarily targeted at hand sanitizers and household cleaners, of which customers can buy four or five depending on the region.

Bottled water, toilet paper, pasta, rice and some canned foods continue to be among the fastest-selling items, store workers said.

U.S. sales of hand sanitizers jumped 313% for the week ending Feb. 29 from the same week a year earlier, according to shopping data released by research consultancy Nielsen. Sales of aerosol disinfectants, wipes and masks also soared, along with oat milk, dried beans and canned meat, the data showed.

Jason Ackerman, co-founder and former chief executive of online grocer Fresh Direct, said food retailers have seen concentrated levels of stockpiling in nonperishable categories and are responding.

"They have to put limits because suppliers won't be able to keep up with the demand," said Mr. Ackerman, adding that limiting purchases could also minimize reselling.

Shoppers have been stocking up in Europe too, Nielsen data showed.

In the U.K., Tesco PLC, Walmart Inc.'s Asda Group and the Co-Op Group are among chains restricting purchases of items such as baked beans, bottled water, long-life milk, bleach, hand sanitizers and dried pasta.

Gojo Industries, which makes Purell hand sanitizer, said it has significantly increased production by adding shifts, extending working hours and boosting capacity.

Not all manufacturers can ramp up production, though, and shoppers are likely to see shortages of items that originate in places hit hard by the virus, consultants say, citing the difficulty of quickly switching to a source in a different country.

"It takes months to find an alternative and there isn't supply out there just waiting," says Ged Futter, a former Asda executive who now works at grocery consulting firm the Retail Mind.

Toilet paper has emerged as a flashpoint in several countries, as shoppers prepare for possible supply disruptions or self-isolation.

In Australia, Woolworths Group Ltd. last week began restricting customers to four packs of toilet paper online and in stores, saying it was trying to maintain stock levels even as its suppliers ramp up local production. A video of two women fighting over a trolley of toilet paper at a Woolworths store recently went viral.

"Don't make it difficult for the vulnerable, elderly, people with disabilities to find basic necessities," tweeted Brad Hazzard, the New South Wales minister for health and medical research, alongside a photo of an empty toilet-roll aisle.

For food distributors and retailers, labor is increasingly coming into focus. Distributor United Natural Foods Inc. is monitoring levels of demand from retailers to decide whether it needs to add more routes for truckers.

Supermarkets are working to ensure that they have enough warehouse employees who can deliver items to stores and are putting staffers in higher-demand areas, such as preparing online orders for pickup, said Jim Hertel, senior vice president at grocery consultancy Inmar Willard Bishop Analytics.

"People don't know exactly what they're dealing with. They're trying to figure out what the puts and takes are going to be from a demand standpoint," Mr. Hertel said. "We're going to run into: How fast can the industry respond?"

In the U.K., the government on Monday said it would relax nighttime curfews on deliveries to supermarkets to help retailers restock more quickly. It also said it was ready to extend the number of hours truckers can work to help the industry with any shortage of delivery drivers.

"While there is plenty of stock available, the challenge for retailers has been to make sure all of it reaches shelves at the earliest opportunity," said Andrew Opie, director of food & sustainability at the British Retail Consortium, an industry trade group.

The industry is also talking with officials as to how best to supply people forced to self-isolate. Delivery startup Instacart Inc. recently rolled out a feature that allows staff to leave groceries at the doorstep and send a photo to customers to alert them, rather than handing over goods in person.

In the U.K., while most large supermarkets offer home delivery, the number of pickers, drivers and vehicles is limited. Ideas floated on a call between government and industry representatives Monday included asking the army to supply drivers and vehicles, and tapping volunteer groups who already deliver food to elderly people, according to a person familiar with the matter.

Write to Jaewon Kang at jaewon.kang@wsj.com and Saabira Chaudhuri at saabira.chaudhuri@wsj.com

(END) Dow Jones Newswires

March 10, 2020 11:56 ET (15:56 GMT)

Tesco (PK) (USOTC:TSCDY)
Historical Stock Chart
From Nov 2024 to Dec 2024

Tesco (PK) (USOTC:TSCDY)
Historical Stock Chart
From Dec 2023 to Dec 2024