Summary

• Tesco And Morrison have reintroduced purchase limits of up to three per customers, on items such as toilet rolls, flour, and dried pasta to prevent a panic buying akin to the early days of the pandemic.
• Recently the scientific advisor to the British government has stated that given the already increasing number of new infections in other European countries the UK should be ready to take stringent measures should situation start to deteriorate here as well.
• The government, on its part, has issued a fresh directive for retailers to be extra vigilant regarding safety measures being followed by their staff and customers.

The statements of the chief medical officer and the chief scientific advisor to the British government regarding the required preparedness for a resurgence of the pandemic has sent the country into a panic mode. Most of the large supermarkets and retailers have been witnessing a panic buying spree in the last couple of days as was seen in the initial days of the outbreak. Two of the country’s largest retailers, Tesco and Morrison, have already started to ration the number of merchandises they would sell per person to avoid a re-run of March 2020 panic buying. While other retailers and supermarket chains may also follow the trend in coming days, but the government directive to the supermarkets is clear that they should make sure that safety measures are being adequately followed in their premises.

The risk of a resurgence of the pandemic and panic buying

The risk of a resurgence of the pandemic is very high in the United Kingdom at this time. Based on the experience gained with the SARS and MERS pandemic, experts had already been putting out warning signals that the pandemic could make a resurgence in the winter months. Several other countries have started to witness spike in new infection rates leading to fears that the resurgence has already started and that it is not long before it starts knocking at the British doors. The government, on its part, had already allocated funds to the NHS to enhance its preparedness to deal with the eventuality, but that cannot negate the element of risk completely.

People who have just witnessed how hard life became after the imposition of the lockdown are visibly worried about the possibility of the recurrence of the lockdown. Most people who had been dependent on online delivery of grocery and another essential consumable would now be more inclined to stock up in bulk to avoid the eventuality should it happen again. Additionally, the winter months are difficult in the UK, like most other countries in the region as people need to stock up additional provisions for home heating in addition to general merchandise. This will certainly increase their expenditures in the winter months, making them rush for ways and means to get discounts and reduce their expenditures wherever possible.

The level of preparedness in the UK to deal with a resurgence

Fighting the pandemic for the past seven months now has taught the country and people a lot about the virus as well as to deal with a situation like this. The NHS knows more about the virus now than it did in the month of March. The testing facilities, quarantine facilities, treatment procedures that have been set up and developed over the past few months would also come handy in tacking a resurgence of the pandemic.

Most importantly, people are now more aware of how to keep themselves and their families safe while continuing to work from home and stay productively employed. The additional resources that have been allocated by the government along with the above-stated level of preparation could very well be the best defensive combination the country can deploy against the resurgence. Moreover, it is likely that the earliest candidates of the vaccine will be available by the beginning of the next year, giving the country more ammunition to defeat the pandemic.

The Share price performance of Tesco Plc since the beginning of the year (YTD)

(Source -Thomson Reuters)

The shares of Tesco Plc (LON:TSCO) have been showing a volatile trend at the London Stock Exchange since the beginning of the year. On 2 January 2020, the shares of the company were at GBX 255.80 per share, and towards the second week of March, it took a sharp turn downwards to reach a low of GBX 211.29 on 12 March 2020. Thereafter the stock recovered to GBX 248.20 on 13 May 2020, before once again getting into a downward spiral, and as of 25 September 2020, the shares of the company were quoted at GBX 216.00 at the close of the day’s trade.

Tesco Plc is the largest groceries retailer in the United Kingdom, having over 30 per cent of the market share. Headquartered in Welwyn Garden City, Hertfordshire in England, the company, is the third-largest retailer in the world in terms of gross revenues.

The Share price performance of WM Morrison Supermarkets Plc since the beginning of the year (YTD)

(Source -Thomson Reuters)

The shares of WM Morrison Supermarkets Plc (LON:MRW) have been volatile at the London Stock Exchange since the beginning of the year. On 2 January 2020, the shares of the company traded on the exchange at GBX 202.40 per share, and towards the third week of March, it took a sharp turn downwards to reach a low of GBX 164.20 on 16 March 2020. Thereafter the stock recovered to GBX 199.30 on 18 March 2020, before getting into a sideways trend. As of 25 September 2020, the shares of the company were quoted at GBX 173.15 at the close of the day’s trade.

WM Morrison Supermarkets Plc is the fourth largest retail supermarket chain company in the United Kingdom. The company is one of the largest companies in the United Kingdom, and its shares are constituents of the FTSE 100 index.