Online supermarket Ocado sees orders jump as coronavirus spreads

LONDON (Reuters) - British online supermarket Ocado OCDO.L has advised customers to place orders further in advance because of "exceptionally high demand", indicating a possible reaction from shoppers to the spreading coronavirus outbreak.

FILE PHOTO: A delivery van leaves the dispatch area of the Ocado CFC (customer fulfilment centre) in Andover, Britain, May 1, 2018. REUTERS/Peter Nicholls

British Prime Minister Boris Johnson said on Monday that the country needed to be prepared for the coronavirus to spread further and would announce its main action plan for responding to the outbreak on Tuesday. Confirmed cases in the UK have risen to 40.

Ocado, a pioneer in online food shopping, e-mailed some customers on Friday to warn of high demand for its delivery service.

“More people than usual seem to be placing particularly large orders. As a result, delivery slots are selling out quicker than expected,” it said.

The company advised customers to place orders further in advance than they might normally.

It also asked customers to book weekday delivery (Monday to Thursday) rather than weekends if they are able to be flexible.

Shares in Ocado were up 6.5% at 1549 GMT.

The company, which is Britain’s fastest growing grocer, according to industry data, declined to comment further.

Britain's traditional big four supermarkets - industry leader Tesco TSCO.L, Sainsbury's SBRY.L, Asda WMT.N and Morrisons MRW.L - did not have any immediate comment when asked if they had seen an upturn in demand for their online services as Britons start to avoid social contact.

However, Andrew Opie, director of food and sustainability at the British Retail Consortium, which represents the industry, said retailers were monitoring consumer behaviour to anticipate changes in future demand.


Separately on Monday, Bernstein food retail analyst Bruno Monteyne said that in a pandemic scenario parents and carers of the sick would be unable to work, leading to a broader impact on supply chains than only those who contract the virus.

“With tight supply chains, if a major outbreak happens, that will quickly lead to panic buying, empty shelves and food riots,” he said in a note.

Monteyne said the industry will be drawing up plans with suppliers to rationalise product ranges and transition to a “feed-the-nation” status when necessary.

He forecast that sales would be resilient but profit would take a hit because supermarket groups will be reluctant to pass on to shoppers the temporary operational costs of dealing with the disruption.

The BRC’s Opie said disruption to supply chains has been limited so far, and the availability of products remains good.

But he noted that sales of hand sanitiser have risen as individuals and businesses take precautions to reduce the spread of the virus, adding that retailers were also taking necessary steps to meet the rise in demand for hygiene products.

Shares in Tesco, Sainsbury’s and Morrisons were flat, up 4.1% and up 5.3% respectively, with the latter two recouping some of last week’s losses.

Reporting by James Davey; Editing by David Goodman and Jane Merriman