Portsmouth International Port (and supermarkets) respond to COVID-19

Portsmouth Harbour is eerily quiet. Devoid of leisure craft, it is however, working.

“We’re working hard as an essential service to keep goods reaching the public and are as busy as usual, with regular daily sailings, seven days a week,” says Mike Sellers, Portsmouth International Port’s director.

“Customers, Brittany Ferries and Condor Ferries, are prioritising freight. The Channel Islands rely on Portsmouth for 95% of all goods and their supermarkets depend on reliable services so they can keep their shelves stocked.

“Brittany Ferries has also increased its freight route to Portsmouth, now running to Cherbourg in addition to Caen and St Malo.

“Fresh produce coming through Portico, our international cargo terminal warehouses, are stocked – no shortage of supply.

“We are proud of the commitment shown by our staff. We’re all in this together. Doing what we can, when we can.”

Working practices are changing across many industries.

An article published in The Grocer looked at how retailers and suppliers and the government are responding to the coronavirus outbreak.

Supermarkets are limiting purchases across the board.

It’s not rationing, they argue. But from the early limits placed on dried pasta, tinned tomatoes, hand sanitisers and loo roll, supermarkets are extending this. Of the big four, Asda, Sainsbury’s and Tesco have slapped a three-product maximum on any grocery product, this week, with some Tesco stores particularly badly hit reducing it to two.

One outlier is Morrisons, which has so far limited restrictions to only a handful of products, with CEO David Potts claiming limits could be interpreted as “a target as opposed to a cap” – though he admitted it might be forced to review this if the situation doesn’t improve. Supermarket bosses also appealed directly to consumers to stop panic buying in a series of national newspaper ads but so far at least they have fallen on deaf ears.

Supermarkets are slashing ranges and retailers are focusing on core lines. This is already leading to a massive change in everyday production and effectively a “coronavirus reset” of ranges.

Morrisons CEO David Potts says rationalisation will enable quicker replenishment of shelves as supermarkets adopt a “war footing”. For example, a switch from 17 core bakery lines to just seven had already enabled production to rise from 850,000 loaves to 1.4 million loaves in the past week, he says.

Some suppliers have scrapped up to 70% of their ranges temporarily to deal with the crisis and concentrate on the remaining 30. For example, switching to nine roll toilet roll packs only.

Supermarkets are recruiting more staff, redeploying staff, and altering opening hours.

The Co-op has created up to 5,000 new store-based roles. Tesco, Sainsbury’s and Asda are also understood to be recruiting, while 2,100 John Lewis staff have been redeployed to work in Waitrose stores, and M&S has also switched fashion workers to food. In-store counters at major multiples have been suspended, along with in-store cafés and pizza counters, to focus on replenishment, and to free up warehouse and lorry capacity. Opening hours are also being reduced to allow more time to replenish ransacked stores, with Tesco 24-hour stores now closing at 10pm, for example.

Supermarkets have successfully lobbied for red tape cuts

Delivery curfews have been lifted and driver hours relaxed. Competition laws were also lifted to allow rivals to co-ordinate their response in a number of areas, including sharing data and logistics and even allowing them to confer to keep a minimum number of stores open, in the event of mass absenteeism from people sick or looking after loved ones. The government is also waiving the 5p plastic bag charge for online purchases to speed up deliveries and minimise cross-contamination from reusing crates, although, for now, the charge will remain in place for in-store purchases.

Online capacity is increasing

While shelves in physical stores have been stripped bare, the crisis in online shopping has stretched services to breaking point. Ocado experienced a near 1,000% increase in web traffic since the outbreak and enjoyed a 30% uplift in business but it came at a cost, with a complete suspension of the site for three days, says The Grocer.

Even for those who’ve not experienced IT meltdowns, with delivery slots fully booked for the foreseeable future, the existing online infrastructure is insufficient to tackle the disease, so supermarket bosses are trying to find ways to limit online orders to the elderly and self-isolating.

Tesco boss, Dave Lewis, wrote to customers this week that those in good health and not self-isolating should shop in-store, despite the problems with availability, to free up online services for the elderly and the sick.

Sainsbury’s CEO, Mike Coupe, also wrote again to customers vowing (among other things) to significantly increase the number of click & collect sites across the country in coming days.

And Morrisons is also launching a new customer call centre for customers not signed up to online delivery, amid fears many older patients will struggle to cope with the technology.

Meanwhile, retail bosses and government have floated that Deliveroo, Just Eat, Uber Eats, Yodel, DHL and other high street retailers take on additional supply chain capacity. “There is unparalleled demand for food retailers and at the same time an unparalleled demise of others in non-food,” an industry source says. “The big question is can non-food step up and help food retail cope with the demand and help with food deliveries. We have already seen this happen in China with their equivalents of Uber Eats and Deliveroo.”

Supermarkets are helping suppliers face cashflow crisis … up to a point

It’s not just the out of home sector warning of mass business failures. A deadly combination of staff shortages and slashed orders could be the death knell for many food suppliers.

Morrisons announced plans to introduce “immediate payments” for smaller suppliers to help cashflow, and upped its definition of ‘smaller’ from those with sales of £100,000 to £1m this week, says The Grocer.

Other retailers claimed existing protection for suppliers would suffice, but on Friday, Tesco switched from 14-day terms to five. Aldi said it paid suppliers on 14-day terms and would work to assist any that are struggling.

While some suppliers face delistings or are set to lose foodservice sales, even among those suppliers whose take-home business is booming, cashflow is a major challenge. Many suppliers are suggesting it will be a question of who is not struggling rather than the other way around, such is the extent of the crisis.

Cashflow will also be a challenge for wholesalers, says Sony Bihal, owner of Time Wholesale in Essex. He’s calling on large suppliers to extend payment terms to their customers or risk seeing businesses collapse.

“My recommendation and advice is that large suppliers must extend terms to their customers and work together in supporting businesses through this pandemic.”

Despite panic buying the food chain continues to function – at home and abroad

Behind the scenes, the food supply chain is still working. And not just in the UK. Fresh produce supplies from Spain and Italy continue despite the lockdown. EU transport ministers agreed to introduce ‘green lanes’ at borders to allow food and other essential goods to flow more easily.

“If you watch the TV screens, you would be forgiven for thinking all of Europe is in lockdown,” says Futter. “But it’s not like that in reality. The ports are all open and food is on the move. Yes, there have been problems with the extraordinary demand caused by stockpiling, but it really isn’t necessary. The industry is reacting. It will cope.”

Read more online in The Grocer.