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USING SWOT ANALYSIS

Case study: Tesco Article 1 Tesco to create 16,000 permanent jobs to bolster online business UK supermarket chain expects internet sales to rise two-thirds this year to 5.5bn. Tesco says online sales now account for 16 per cent of its total, up from 9 per cent before the pandemic Plea follow one- system Tesco will create 16,000 permanent jobs at its online grocery business, as the UK's largest grocer seeks a bigger share of a market turbocharged by the coronavirus crisis. The move will see the chain add 10,000 permanent "pickers, who assemble customers online orders, and 3.000 drivers to deliver them. Grocers and delivery services such as Ocado have recorded vigorous growth in their digital sales as the pandemic has prompted consumers to order their groceries rather than travel to supermarkets to purchase them. The 16,000 permanent jobs were in addition to 4,000 created since the crisis started, the retailer said on Monday, Sigramnya vote of confidence in . said on Monday, signalling a vote of confidence in the pandemic-fuelled digital growth. The news comes at a bleak time for the UK labour market. Britain has already shed almost 750,000 jobs during the pandemic and economists worry that the number will rise sharply as the government winds down the employment retention scheme and companies cut staff permanently. Tesco said on Monday that online sales now accounted for 16 per cent of its total, up from 9 per cent before the pandemic, and that almost 1.5m people a week were buying groceries through its website, compared with 600,000 at the start of the crisis. It expects sales over the internet to jump two-thirds this year to 5.5bn. The trend has been replicated across the industry, with online market share reaching a record 13.5 per cent in the 12 weeks to August 9, data from market research group Kantar show. The coronavirus pandemic had, in a matter of months, propelled online market share gains that previously would have taken years to achieve, said Clive Black, analyst at Shore Capital. "It feels pretty permanent this change; a lot of people such as the elderly who had shunned digitisation have now become internet shoppers and won't go back to stores," he added. But online shopping is not without its challenges. Supermarkets have struggled to profit from the boom in demand for home deliveries, with both Tesco and rival J Sainsbury having said they expect to make the same profits this year despite a huge transfer of food consumption from restaurants and bars. The cost of piolingadore stomers, coupled The cost of picking orders for customers, coupled with offers of free delivery to lure new shoppers, has long dragged down profit margins for online deliveries. But with supermarkets now operating online channels at full capacity there is no longer any need for aggressive promotions. Mr Black said the larger number of home deliveries also meant vans did not have to travel as far to empty their loads. "A marginally lossmaking business is becoming marginally profitable," he added. Dave Lewis, the outgoing chief executive of Tesco, has previously said that the chain's large number of stores means it is close to many customers, allowing it to scale up deliveries without heavy capital expenditure. During a call with analysts in June, Mr Lewis said the online business "might be margin dilutive, but it is not decaying overall profit", adding that the company had worked very hard over the last five years to make it a positive contribution". Tesco, the biggest UK supermarket by market share, on Monday said it expected the majority" of the new permanent positions to be filled by temporary employees who had joined since the Covid-19 crisis began. In order to meet high demand and cover the absence of vulnerable employees, the company had by June hired 47,000 temporary workers. These new roles will help us continue to meet online demand for the long term," said Jason Tarry, chief executive of Tesco's UK business. Tesco, which employs 320,000 people in the UK and Ireland, said in June that it faced rising costs to adapt its business to endure the Covid-19 crisis, including spending to increase its online capacity. Its shares, little changed on Monday, have fallen 106 por contheworless than the Article 2 Tesco and Sainsbury's sales outpace Aldi for first time in a decade Traditional supermarkets benefit as larger stores make social distancing easier. OOICE Please keep 2m apart The UK's two biggest supermarkets have increased sales at a faster rate than discounter Aldi for the first time in a decade, as the coronavirus pandemic spurred weekly shops and more online ordering In the 12 weeks to May 16, Tesco's sales rose 11.7 per cent and those of J Sainsbury grew 11 per cent year on year, according to Nielsen. Sales at Aldi, the larger of the two German-owned discounters operating in the UK, rose 10.1 per cent. But sales growth at the biggest supermarkets was still outstripped by its compatriot Lidl, which lifted sales 13.8 per cent. Kantar, another researcher, highlighted similar trends albeit with slightly different growth rates due to different measuring methodology. The period encompasses all of the current lockdown and the three weeks before it, when supermarkets benefited from a rush to stockpile essential items. Since the lockdown began on March 23, all supermarkets have been helped by trend towards larger spend in each trin Nielsen March 23, all supermarkets have been helped by a trend towards larger spend in each trip. Nielsen found that store visits were down 24 per cent in the four weeks to May 16 as consumers tried to avoid exposure to crowded areas. But spend per trip was up 45 per cent Tesco and Sainsbury's have also been boosted by their ability to expand their home delivery and click-and-collect operations. Both have effectively doubled the number of orders they can dispatch in a week, to 1.2m and 600,000 respectively, by hiring thousands of extra pickers and van drivers --- although both acknowledge that they still cannot meet demand. Asda and Wm Morrison have also expanded online delivery but their sales grew by less because they do not operate convenience stores, which have also prospered during the pandemic. Overall, online grocery accounts for about 13 per cent of total sales, according to Nielsen, up from around 7 per cent before Covid-19 struck. Most analysts think that proportion will fall back a little once the pandemic ends, but will remain higher than previous levels. Aside from higher transaction values, the main driver of growth at Aldi and Lidl is likely to have been new stores. Aldi has opened more than 40 outlets over the past year, taking its total estate to 875. Neither company offers online grocery ordering although Aldi did recently start a trial at a small number of stores where its staff pick online orders and Deliveroo takes them to customers. Clive Black at Shore Capital said the pandemic has helped traditional supermarkets, which have large stores and car parks that make social distancing easier and wide product ranges that support big weekly shops. Discounters tend to have also expanded online delivery but their sales grew by less because they do not operate convenience stores, which have also prospered during the pandemic. Overall, online grocery accounts for about 13 per cent of total sales, according to Nielsen, up from around 7 per cent before Covid-19 struck. Most analysts think that proportion will fall back a little once the pandemic ends, but will remain higher than previous levels. Aside from higher transaction values, the main driver of growth at Aldi and Lidl is likely to have been new stores. Aldi has opened more than 40 outlets over the past year, taking its total estate to 875. Neither company offers online grocery ordering although Aldi did recently start a trial at a small number of stores where its staff pick online orders and Deliveroo takes them to customers. Clive Black at Shore Capital said the pandemic has helped traditional supermarkets, which have large stores and car parks that make social distancing easier and wide product ranges that support big weekly shops. Discounters tend to operate from smaller stores with more limited parking and offer a narrower selection of products