Tesco’s (TSCO.L) customers made fewer trips to the supermarket during lockdown but did bigger shops when they did visit.
Shopping frequency fell by 32% in the 13 weeks to 30 May, Tesco said on Friday, but basket size jumped by 64%.
The change coincided with lockdown being announced in the UK, which prompted the government to urge Brits to only shop once a week for essentials. The period also coincided with an outbreak of panic buying before lockdown was announced, as Brits filled store cupboards in anticipation.
Tesco said that overall sales in its first quarter rose by 8.2% in the UK and Ireland when currency fluctuations are excluded.
“Through a very challenging period for everyone, Tesco colleagues have gone above and beyond, and I'm extremely proud of what they've achieved,” chief executive Dave Lewis said in a statement.
“Their selfless efforts, combined with our embedded strategic advantages in stores and online, have helped to ensure that everyone can get the food they need in a safe environment.”
Sales were helped by Tesco more than doubling the capacity of its online ordering system from 600,000 slots per week to 1.6m. The upgrade, which cost £4m ($5m), helped drive a 48.5% rise in online orders in the first quarter.
One blot on Tesco’s copybook was its bank. The group said sales at Tesco Bank fell 26.5% as a result of the closure of its travel money business and a reduction in ATM usage. Tesco also warned that its bank would likely make a loss of up to £200m this year as a result of the COVID-19 pandemic, which is expected to cause loans and credit card debt to go into default.
Tesco said it has spend £65m so far on PPE for staff and expects the pandemic to cost the company around £840m this year. That is down from an earlier estimate of £925m.
Shares initially dipped but were trading up 0.6% by just after 9am London time on Friday.