Impact of Covid-19 on Tesco's Sales in the Retailing Industry
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This research assignment analyzes and evaluates the negative impact of Covid-19 on Tesco's sales in the retailing industry. It explores the challenges faced by Tesco and provides recommendations for the future.
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Table of Contents INTRODUCTION.....................................................................................................................................2 BACKGROUND.......................................................................................................................................4 Aim....................................................................................................................................................4 Objective...........................................................................................................................................4 Research Questions...........................................................................................................................5 Significance.......................................................................................................................................5 RESEARCH METHODOLOGY.......................................................................................................5 RESEARCH FINDINGS...................................................................................................................7 Primary research data........................................................................................................................7 Critical evaluation of identified issues.............................................................................................15 RECOMMENDATIONS..........................................................................................................................18 CONCLUSION.......................................................................................................................................19 REFERENCES........................................................................................................................................21
INTRODUCTION Covid-19 pandemic has become worldwide issue from past few months because it has affected all business sectors i.e. travel and tourism, hospitality, pharmaceutical and retail industry negatively. Generally, retail industry is highly impacted from Covid-19 as compared others. the reason behind is that this sector is properly dependent on two chain management i.e. logistic and supply chain management.Logistic chain helps retail companies to provide products on time while supply chain management build platform between retail company and customers. Due to Covid-19 retail companies unable to provide their products to the customer on time. there are other MNC’s that uses digital media to provide home delivery services to the customer but lockdown has reductant on this strategy negatively (Kharoubiand Dolle, 2020). Thus, retail sector is majorly impacted from this lockdown instead of other sectors. There are various SME businesses that have shut down their retail stores due to lack of product selling but MNC’s are struggling with this situation.Still vaccine is not available for the treatment of this corona disease so all governments of different countries like UK have formulated social distancing law and quarantine terms. Such laws and lockdown have brought huge financial loss in the retail. This Covid-19 pandemic is not only affected people physically but also mentally for example most of the employees who employ in MNC’s or small-scale companies avoids to go on work to keep thing like they can be infected as resulted that leads poor productivity of staff in the workplace. Thus, it will be valid to say that global pandemic Covid-19 has brought heavily financial loss in retail sector that directly affect GDP rate of multiple countries. In this research assignment will give brief information over challenges and issues that are havingand will have faced by Tesco in the retail industry due to pandemic Covid-19. This research will assist all retail companies in order to deal with current situations which are facing by them. It will encompass all actual fact related to retail sector that arises due to this pandemic (Authority, 2018). This research project will indicate that how retail companies have faced heavy financial loss and will evaluate all challenges that can impact post covid-19 as well. There is a main reason to choose this topic for the research is that there are most of retail companies like Tesco still struggling to sustain in market while trying to comply with all regulation which have formulated by UK’s government. In this research will pick all authentic resources associated with research topic so that optimum result can be received. It will highlight probable solutions of identified challenges which will supports
retail sector to deal with this pandemic effectively. Overall, this research assignment will act as solution for the retail sector in current time and future perspective as well. Tesco is a British multinational company that is headquartered in England, UK. it has wide product line and services and offers them to the customer through it’s subsidiaries which is located into multiple countries across the world. It has faced heavy financial loss due to Covid-19 in past few months. BACKGROUND There have been a lot of changes in the growth factor of the retailing industry due to the outbreak of pandemic and the company already had made so many changes because of the Brexit to make the sales increase. Retailing industry contributes to the GDP of the country and due to social distancing and lockdowns the customers coming in the organization are limited. There are a lot of investments which the retailing organizations have put in the company to be able to operate effectively after Brexit and due to. The small businesses in the market are shutting down because there are no customers and the sales have reduced to such extent that the company cannot function further. The lockdowns and social distancing is a lot of problems which the company is facing but slowly when the market picks up again there are a lot of strict actions which will have to be taken. There has to be a research which Tesco will have to do of the market so that the further decisions can be taken by the organization effectively and be able to increase the sales again in the market. Aim “The aim is to analyse and evaluate the negative force on the sales in the retailing industry of the country after the Covid-19. The case study is on Tesco organization.” Objective Covid-19 has created a lot of impact on the sales which is going to be evaluated for the retailing industry. Identify the impact of this situation on the sales of Tesco organization in specific.
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There are a lot of challenges which the organization has faced for the sales to decrease. Recommendations on the bases of the challenges which the company has had to face. Research Questions Affect of Covid-19 on the retailing industry of United Kingdom? Impact on the sales of Tesco because of Covid-19? Due to declining sales what are the challenges which Tesco has had to face? Significance There is a lot of influence of Covid-19 in the retailing sector which is going to be discussed in the further report and this is going to continue like this. There are a lot of businesses which have had to close down forever due to this factor as they were not being able to maintain the employees and the sales was not there. The research is about the challenges and recommendations for the retailing businesses in the market so that there is going to be a better functioning in the further (Van der Sluis, Burden and Huet, 2017). People will have to live with pandemic situation for long which does not stop businesses to stop functioning therefore there are important decisions which will have to be taken. The research is recommended not just by scholars but other report and researchers as well so that there is a better understanding of the current situation for Tesco and better decisions can be taken for the future as well by the organization. RESEARCH METHODOLOGY Research Type:Research is the process that involves searching new ideas, information and thoughts which helps to influence the already known facts over the topic of research. Research are of two types qualitative and quantitative. Qualitative type of research comprises with information and facts in qualitative form (Rodrigues and Rosa, 2019). Theoretical form of information is a part of qualitative type of research. Quantitative type of research involves information related to mathematical facts and figures. Quantitative type of research comprises with only relevant facts and figures related to the research topic. This report is based on the qualitative type of research. This will allow researcher to achieve the overall objectives behind the research.
Research Philosophy: Research philosophy is defined as the concepts and theories behind theresearch.Researchphilosophiesareoftwotypesi.e.positivismandinterpretive. Positivism philosophy aims to gather and collect actual data and information which is already availableoverinternetandotherinformationsources(Clarkandet.al.,2017).While interpretive philosophy is all about interpretations. In this philosophy all information are analysed on the basis of interpretations of researcher. Positivism philosophy is used in this research. Research Design: Research design is a design of the research. There are total three types of research designs i.e. inductive, deductive and adductive. Inductive research design starts with a set of empirical observation, seeking patterns in those observations and then theorizing such patterns. Deductive research design starts with the theory than it switches on developing hypotheses from the theories available over the topic ad than collecting and analysing all the information. Abductive research mostly based on the observation. This research is based on the abductive research design. Research Approach: Research approach is off three types exploratory, descriptive and explanatory. Descriptive research approach is about to understand attitude of individuals while explanatory approach is proposed to determine factors which impacts on business environment directly and indirectly (Huang, Fang and Chen, 2017). Explanatory approach is designed to achieve logical answering over given questions. Explanatory research approach is used for doing this research. Questionnaire method is used in completing this research. Research Sampling:There are two methods of data collection such as probably and non- probably method.Probability sampling technique involves random sampling as it does not approach all sources to gather information for the research. Non probability sampling approaches all possible sources to gather information for the research (Cuervo‐Cazurra and et.al., 2017). This research has used probability sampling method to gain the complete advantages over the research. To conduct the primary research 30 employees at Tesco Company took participated in the research. Data Collection:Data collection is all about collecting necessary information for completing the research. Data are collected with two method primary method of data collection and the other one is secondary method of data collection. Primary method of data collection is all about collecting information by putting up the individual efforts of the individual in gathering all such information required for completing the research (Ratnam, 2019). Secondary method
involves using the already used information for achieving the overall objectives behind the research. This research is based on the both primary and secondary data collection method as it provide all required information and also the technique is time saving technique for collecting information. To collect the data employees were asked questions. 30 Employees of Tesco Company took participated in the survey for sharing the knowledge and information. Data Analysis:Data analysis is all about analysing the information collected through data collection method. This is a simple technique that involves analysing the entire information and on the basis of the analysis conclusion is drafted over the research topic. Data analysis plays an important role in completing the research. Data analysis is conducted with two methods thematic analysis and content analysis (Lynch and Mannion, 2016). Content analysis is about to assess the content available over the research topic. Thematic analysis used sources and statistics to achieve the research objectives. Thematic analysis method is used in this research. Ethical Consideration:Ethical consideration is all about maintaining the authenticity of the research. This involve following right methods for collecting the required information for the research. Different principles are followed for the ethical consideration in this research. Such principles are identified as minimising the risk of harm in this researcher has not created any offense that can harm someone (Whicher, Philbin and Aronson, 2018). Obtaining information consent has also taken care which involves that right sources for information has used in this research. Protection of anonymity and confidentiality is used in this research. This involves maintaining the proper confidentiality in respect to all the employees of Tesco Company which has provided information for this research and also about the other sources of information. Principle of avoidance of descriptive practices has also followed which involved keeping the information precise and limited. Ethical principle providing right to withdraw has also kept in the research. All the principles are followed in completing the entire research. RESEARCH FINDINGS Primary research data The primary research has been conducted in accordance with the aim and objectives behind the research. Using the thematic data analysis technique, the collected data can be presented in following manner. Theme 1: Respondent agreed that Tesco Company have been severelyaffected.
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How has Tesco Company been affected by the corona virus pandemic? Frequency Extremely affected25 Affected5 Neutral0 Unaffected0 Completely unaffected0 Total30 83% 17% 1 2 3 4 5 Interpretation: The above mentioned chart shown that 25 out of the 30 respondents stated that they were severely affected from the pandemic. The company has been affected at an extreme level due to the Covid- 19 pandemic and the decline in their business was significant. This is evident that lockdown could suffer the entire business environment (Bairagi and Munot, 2019). Guidance issued by the world health organisation has also clearly shown that only the needed essential must buy by all the people in UK. The reaming 5 employees
involved in the research has also projected that company got affected from the pandemic. It can be interpreted that company could suffer from the pandemic situation in from of lesser sales turnover. Theme 2: Acceptance of customers about the products. Is the customers find the products safe at stores?Frequency Yes15 No15 Total30 50%50% 1 2 Interpretation: The above mentioned chart project that almost half of the customers enters the store of Tesco Company do not find the product safe. 15 out of 30 employees involved in the survey do belief that only half customer’s feels safe buying product from the stores at Tesco. This clearly shown about the fear customers carry while buying products in this pandemic situation. It is interpreted that due to the fear in the mind of customers company’s business has been terribly affected from the pandemic. Rest 15 employees do not feel that customer do not feel safe due to the deadliness of the virus. It easily spread in human being which has clearly shown in the research.
Theme 3: The arrival frequency of visitors in stores of Tesco. What is the arrival frequency of the customers in the storesFrequency Regular0 Once in a while20 Rarely5 Customers are no longer visiting5 Total30 1 2 3 4 0%10%20%30%40%50%60%70% 0% 67% 17% 17% Series1 Interpretation: The above mentioned charts project that the frequency of customers visiting stores of Tesco Company has been stopped. 20 employees specified that customers are visiting stores once in a while to buy all the products they need. This project about the fear customers have in the mind by infecting with the virus (Paul, 2017). Most of the times customers buy products and groceries in bulk so they do not need to visit the stores continuously. As per the opinions stated by 5 employees customers are not remaining visiting the stores of company after the pandemic. 5 employees clearly shared that customers are not interested in coming at the stores. Employees specify that some of the regular customers are not visiting stores of Tesco after the pandemic situation. It can be interpreted that due to the
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pandemic the business has seen a huge damage. Customers feels fear after visiting the stores even the proper amenities are offering like social distancing at stores, sanitizers and other facilities are serving to customers at all stores of company. It can be specify that the pandemic has hit the business very badly and it will take some time to get back the business at its normal and regular pace. Theme 4: Majority of the employees agreed that they are facing a variety of challenges. What according to you is the major challenge post Covid- 19 Tesco Company is facing? Frequency Selling product5 Earn profits8 Product supply7 All of the above10 Total30 1 2 3 4 0%5%10%15%20%25%30%35% 17% 27% 23% 33% Series1 Interpretation: 5 out of 30 employees participated in survey specified that company is facing trouble in selling products. Employee does believe that the Tesco Company is facing many challenges post lockdown due to COVID 19 pandemic. Some employee’s beliefs that selling products is a big challenge for the company. 8 employees have specified that earning
profits is a huge challenge company is facing at this point in time. 7 employees participated in survey said that supply of products is another key challenge company is facing which also mentioned by many of the employees. 33 % of employees specify that all the challenges like selling products, earning profits and product supply are all key challenges business is facing post lockdown period. Theme 5: Online selling is more convenient after COVID 19 Pandemic. Do you feel online trade is more convenient post COVID 19? Frequency Very convenient20 Convenient5 Not effective5 Total30 67% 17% 17% 1 2 3 Interpretation:Theabovechartprojectthatonlinetradingismoreconvenientpost pandemic. 20 employees participated in the survey has voted for online trade as it is convenient to buy products in this situation. Almost majority of customers prefers ordering online which indicate that company must focus over e-commerce trade of its products.
Majority of employees has voted that e-commerce trade is more convenient to meet the business objectives. The COVID 19 situation has created fear in the mind of customers which motivated tem to order online all their needs. 5 employees also denied this fact else the employees voted in favour of the online trade to sale company’s products. This research has taken 30 employees of Tesco to find different aspects of the research. Theme 6: Do you think pandemic has boosted the e-commerce trade of Tesco Company. Do you believe that e-commerce trade of the company has been boosted post pandemic? Frequency Yes25 No3 No Idea2 Total30 83% 10% 7% 1 2 3 Interpretation: It can be interpreted that company could boost its online trading after the COVID 19 Pandemic situation. 25 employees out of 30 participated in survey do believe that the entire situation of COVID 19 has opposed to the government to launch lockdown all across the United Kingdom and also the other part of the world. Online trading was the only
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way to fetch all the order of customers. Customers all across the glove has switched towards the e-commerce trade for meeting all heir different needs. Lockdown did not provide access to the e-commerce trade but post lockdown majority of customers was keener towards ordering products online. Tesco Company has witnessed a huge growth in its e-commerce trade post lockdown. 3 employees did not mentioned about any boost in sales of company. The possible reason might be that they are not aware with the situation. 2 employees had no idea about the selling statistics of company. Theme 7: Company’s presence in e-commerce business has given a huge benefits post lockdown. Do you believe that Tesco Company’s already presence in e-commerce market has given more growth chances to the e-commerce trade of company post lockdown? Frequency Yes20 No5 No Idea5 Total30 67% 17% 17% 1 2 3
Interpretation:As per the views given by employees of Tesco over E-commerce growth of company it can be stated that due to the corona virus pandemic it can be projected that company has registered a huge growth in its e-commerce trade post lockdown. Almost 20 employees involved in the survey which is 66% employees of company has given their views that company has taken a huge advantages in form of e-commerce trade post lockdown situation. The pandemic of COVID 19 has generated fear in the mind of the people across the globe as this virus is very deadly and easily infect to people (Clarke and Visser, 2019). Most of the customers in United Kingdom and other part of the world prefer to buy products of company over internet or any such websites. Tesco Company is not getting proper presence of customers in the stores at physical level but company is getting orders in form of e- commerce trade over internet. This has also allowed company to generate revenue from the business. 5 employees part of survey had no idea about the situation and some completely denied the fact that company has gained a huge advantage in form of e-commerce trade post lockdown. They favoured that Tesco Company is already involved the e-commerce trade which did not created much different post lockdown in the e-commerce sales of company post lockdown period. On the basis of the majority of the views given by employees it can be specifies that the current situation of pandemic has created a huge growth opportunities for the e-commerce trade of company. Critical evaluation of identified issues Porter Five Forces Porter Five Forces is a competitive analysis model involves various forces that put an impact over the business operations of company. The forces like competition in industry, potential of new entrants in market, power of suppliers, power of customers and threat of substitute products. All the forces put an impact over the business of Tesco Company in different contexts that can be projected in the following points. Competition in industry (High):Competition is a huge part of the business environment. Over the period of time retail sector has generated a huge growth in corporate sector. Retail sector comprises with basic products requires for living as a human being. Even in the pandemic situation the grocery market of United Kingdom and other part of the world did not generated much negative impact over its trade as all peoples needed these products to survive (Al Kilani and Kobziev, 2016). Recent activity of COVID 19 Pandemic has put negative impact also in form of lockdown which has affected the market very badly for few months
that has also generated crisis in the market. Company received not any customers in those few months spam of COVID 19. Hence after the lockdown the market reopened and people started visiting the stores which also increased the competition post lockdown and companies started to give attractive offers over online purchases of different retail products. Tesco Company not only involved in selling its products at its stores rather the company engaged in selling its products over internet. E-commerce trade become the prominent method of meeting the needs. Post lockdown the e-commerce market has boosted from the massive demand. As almost majority of customers prefer to buy products over internet. The increasing demand of the e-commerce trade has also increased the competition. Tesco Company needs to face aggressive level of competition from Marks and Spencer Company and many other brands. This force is high as it directly influences the business potential of Tesco Company. Potential of new entrants in market (Low):In the current situation of COVID 19 Pandemic this force is relatively low. In the present situation the market just started to regain its growth back. In this situation even the business houses who have already established in the market could survive somehow. Established companies like Tesco Company also not able to generate the revenues as effective as compare to the previous situation. In recent time company has generated huge demand in its e-commerce trade as the people try to skip visiting outlets to buy products. In this situation not any new stakeholder and investor are initiating to invest in the business. This force is low at this point in time. Power of suppliers (Medium):Suppliers are the crucial part of the business functions. SuppliersinvolvedinsupplyingallproductsatthevariousTescoCompany’sstores. Company carry a strong dependency over its suppliers in order to provide all the latest and trendy products to all its customers. In the pandemic situation t can be projected that company has faced issue in selling its products to its customers (Daniel, 2018). Due to lockdown and pandemic the suppliers of company also faced problems in supplying the products at all stores of company. Both the suppliers and company carry dependency over each other but it can be stated that as the company is a big brand which denotes that suppliers carry more dependency over company. Due to the dependency of suppliers over company this force is low for company. More than Tesco Company suppliers faced more problems in sustaining the business. Power of customer (High):Customers are the most primary stakeholder’s part of the business of company. They play role in the sustainability of business along with the growth
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of the company. Customer carries the high power in boosting the growth of company. In recent time it is witnessed that Tesco Company has received a huge demand in its e- commerce trade due to pandemic. All customers that are regularly visits the stores of Tesco Company went to e-commerce site of company to fetch the order. This is specified that this force is high for company. Due to customer loyalty company could survive in the situation of pandemic. Threat of substitute product (Low):This force is minimum in nature as there is not any potential threat in form of substitute product in the retail sector. Substitute products are all such products that can replace the use of retail products. This force is low as there is not any possibility of entertaining any substitution for retail sector products in the pandemic situation. The above mentioned forces play different roles in affecting the business of Tesco Company. All forces have different impacts over the business operations. Maslow Need Hierarchy Model This model comprises with different needs that put an impact over the employee motivation. In the current situation of pandemic unemployment has become a huge issue in the market. Many companies have relieved its employees due to crisis as the companies are unable to earn profits. This model follows the different needs that can be projected in following points. Physiological need:Physiological need involves the basic needs of employees. Home, food and other basic needs that requires a human being for living. It is essential that all employees at the company meet up their physiological needs in against to the employment opportunity they have gained in company. In the current pandemic situation many jobs has been cut down and many employees got fired at the organisation due to lack of business revenues. All such employees who could sustain the jobs could find its ways to meet these needs. The employees got fired from the jobs could not deal with these needs also. Safety and security:Safety and security is also a crucial need employee of company have. Tesco Company also take care the safety and security need of employee. In the pandemic situation company give huge priority to the job security of employees at the organisation. COVID 19 pandemic has created a huge crisis in the form of unemployment. Company has ensured its employees for not getting fired from the job. This has created a positive impact over employee motivation and mindset.
Self esteem:This is another crucial need employee has as a part of the employment opportunity at organisation. This involves every employee at the organisation get proper respect from the management and co employees. Self actualisation:Self actualisation is among the crucial need employee carry. This involves the growth opportunities organisation serves to its employees. Every employee at the organisation must feel that company can provide its maximum growth opportunities that can suits with the potential of employees. Tesco Company has a diversified organisation hierarchy which has allows company to motivate its human resources. 4Ps of Marketing Mix This is very beneficial strategy of marketing that uses many of companies and ventures in market place. According to lots of business experts, after considering 4Ps of marketing mix, any company or business can simply gain huge profit in various places of market (Donthu and Gustafsson, 2020). That’s why upper management of Tesco should take steps towards adopting this strategy of marketing its business environment. Basically, 4Ps of marketing provides 4 key zones of marketing which has been described below; Product:The Tesco company provides lots of retail products and services, in which it always tries to maintain an effectiveness within its various products and services. Many to people within market like to buy products and services through this company, because Tesco always believes in providing quality products and services different customers. Currently Tesco provides various food and beverage products as well, so now this company tries to provide these products in proper packaging to stop the spread of Covid-19. Price:The company mainly uses competitive strategy of pricing to set an appropriate price to its products and services. This strategy of pricing strategy mainly helps to this company to maintain price of its products something lower than its competitors in the market. Place:Currently Tesco serves in lots of countries, but its key market place is its home country United Kingdom (Fletcher, 2017). Currently Tesco is the leading retail organisation of the United Kingdom with having the strongest supply chain in across the nation. Promotion:Another is promotion, in which the marketing team of Tesco is very active in is job role, because this team always runs such promotional activities in market which can provide excellent results to the company.
RECOMMENDATIONS In this time of pandemic is really tough time to businesses which belongs to any industry or any sector. In this situation, there are the United Kingdom top retail company named Tesco is also has highly affected in negative manner through this pandemic. Currently all business or ventures within across the world are suffering from Covid-19 pandemic, so that upper management at Tesco have to understand this little thing. Means, the Tesco is not only a venture that has badly affected by coronavirus pandemic, because almost all ventures or companies in the UK and entire world has very badly or negatively affected by this pandemic. In the starting of 2020, this virus was founded in China, so on that time date, Tesco is decreasing is sales ration within international retail sector, because there are not very much people in the market place to buy various products and services in market (Malika and James, 2016). However, existing management avoid to very much worrying about its day by day decreasing sales ratio, because there are lots businesses exists within market which has completely collapsed just because of coronavirus. For example; currently businesses which works under the hospitality industry has completely collapsed. There are upper management of Tesco should take some productive steps towards systematically dealing with this existing situation and again increasing its sales ratio. Suppose, after total lockdown of 3 to 4 months, local government of the United Kingdom has permitted to different businesses to again start their business operations, but after taking all precautions in very proper manner. Basically, Tesco’s most products and services comes under the category of essential services, so that there are lots of people or customers visits company’s supermarkets and stores regularly. In this situation, upper management of Tesco need to give orders to it’s all managers and leaders of various supermarkets and stores that, they implement all things in the zone of stores and supermarkets which can protect different customers or employees and many other people through the infection of coronavirus. In the terms of precautions, there are various managers and leaders can use PCR kit for checking symptoms of coronavirus, they can provide sanitizer facility its various people within their stores and supermarkets etc. (Nicola and et.al., 2020). After taking these all precautions, Tesco will able to gain attract lots of customers in market place, because currently people like to buy products and services through only those businesses which properly caring people and protecting people through the infection of coronavirus (Covid-19) pandemic.
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CONCLUSION It can be concluded that top-level management Tesco should be taken quick decisions towards dealing with this existing pandemic situation in very systematic manner. Existing management of this retail firm should consider one that, Tesco is not one company in across the UK and in across the world which suffers from this pandemic situation, because currently almost all businesses faces this situation of Covid-19 which affects them very badly in the market. Basically, thisexisting year 2020 has not provided appropriate profit to this company, because from the beginning of the year to date, Tesco is able to run its business operations only in that time period which has allotted by the local government of the United Kingdom. There are major competitors of Tesco, like; Marks and Spencer, Morrisons, Asda and Iceland foods ltd etc. companies also have very badly affected by this virus. Nowadays, local government of UK has allowed to different companies and ventures to again start their business operations, but according to the local government, only those businesses or ventures has allowed to run their operations of business which are able to maintain proper precautions within their workplace (Seetharaman, 2020). In this situation, upper management of Tesco also need to properly sanitize its various supermarkets and store in every certain time period. Basically, when Tesco maintain extra-ordinary standards of Covid-19 precautions within its various stores and supermarkets, then this company will enable to put very positive impact on various customers in market place. Reason is, due to this Covid-19 pandemic, people within market give priority to buying products and services only through companies which are taking proper steps of precautions in their work zone. This is the main reason that, Tesco should provide facility of proper precautions to its various customers and employees etc.
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