Tesco has held its dividend and will payout USD 782 Million in dividends. The company will receive business tax relief from the British government to help retailers that have been negatively affected by the coronavirus pandemic. Three weeks prior to the lockdown, sales increased by 30%. If trade returned to normal by August, the retailer could offset the increased expenses for retail operations during this time.
Chief Executive Dave Lewis said, “COVID-19 has shown how critical the food supply chain is to the UK and I’m very proud of the way Tesco, as indeed the whole UK food industry, has stepped forward. In this time of crisis we have focused on four things; food for all, safety for everyone, supporting our colleagues and supporting our communities. Initial panic buying has subsided and service levels are returning to normal. There are significant extra costs in feeding the nation at the moment but these are partially offset by the UK Business rates relief. Tesco is a business that rises to a challenge and this will be no different. I would like to thank colleagues for their unbelievable commitment and customers for their help and understanding. Together, we can do this.”
Lewis had made the final call to pay a 6.5 pence dividend to shareholders in receipt of taxpayer money. “What the government has done is recognise there were going to be incredible additional costs to keep feeding the nation,” Lewis told reporters. “Every pound we receive in rates relief will be invested in ensuring that Tesco is able to support Britain’s shoppers through this crisis period.”
Grocery demand within Britain has increased as shoppers have been stocking up on essential goods such a toilet paper and preserved food. There lies much uncertainty on how long this lockdown and COVID-19 pandemic will last. Consumers are doing their best to prepare long term in this lockdown.