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Tesco hires 16,000 staff to cope with Covid-19 shopping habits

After an increase in online sales as a result of the coronavirus pandemic, supermarket Tesco made 16,000 temporary staff permanent to cope with the shift in customer behaviour

Tesco made 16,000 temporary staff permanent hires in August 2020 after the supermarket saw a huge increase in online sales as a result of the coronavirus pandemic.

In its 2020 half-year results, the supermarket claimed it brought in extra temporary employees in the first half of the year to cope with shifting customer demand, 16,000 of which it made permanent in August to maintain “extended picking hours” and increased delivery slots.

The first half of the year saw online sales increase by 69% year on year (YoY) for the retailer.

Ken Murphy, Tesco’s chief executive, said: “The first half of this year has tested our business in ways we had never imagined, and our colleagues have risen brilliantly to every challenge, acting in the best interests of our customers and local communities throughout.

“We are absolutely committed to continuing to invest in value for customers and safety for all in these uncertain times. Tesco is a great business with many strategic advantages. I’m excited by the range of opportunities we have to use those advantages to create further value for our customers and, in doing so, create value for all of our other stakeholders.”

Even before the coronavirus outbreak, customer behaviour was beginning to lean more towards online shopping than physical retail, something that the pandemic and subsequent lockdown exacerbated as customers were forced to take day-to-day tasks such as grocery shopping digital.

The spike in online shopping led to some retailers struggling to cope with increased demand, while also experiencing a lack of customers in physical stores.

Tesco found, alongside an increase in online sales, a shift in customer behaviour towards visiting stores less frequently but an increased basket size when they do visit stores, leading to a 1.4% growth in sales for its larger stores, and an average basket size increasing by 56%.

Consumers also shifted away from goods such as clothing, with Tesco seeing a 17.2% drop in clothing sales and a 0.3% drop in sales of general merchandise in the UK in the 26 weeks to the end of August 2020, but a 9.2% increase in food sales in this period.

As well as hiring new employees to cope with increased online demand, it increased the number of available delivery slots from 0.6m to 1.5m a week.

In 2018, Tesco closed its Tesco Direct website offering with the aim of creating a better customer experience by allowing customers to order all of their Tesco goods from one website, Tesco.com.

The closure of the Tesco Direct fulfilment centre as a result of this put 500 jobs at risk of redundancy across the business at the time.

But the supermarket has been very focused on digital transformation in recent years, expanding the regions that would be able to receive its same-day grocery delivery service in 2017, and then appointing a new chief technology officer, Guus Dekkers, who was tasked with continuing the firm’s digital transformation.

Though it saw a growth in online sales in 2018, it also saw a drop in footfall in its physical locations, and has previously blamed falling profits on its shift towards becoming a more omni-channel-focused retailer.

Its 2020 half-year results saw the retailer break this trend of falling profits, reporting a 28.7% rise in group statutory profit before tax to £551m, compared with £428m in the same period last year.

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