COVID-19 Impact: A Tesco Case Study on Strategic Planning in Retail

This case study examines the impact of the COVID-19 pandemic on the retail industry, focusing on Tesco's strategic planning and operations in the UK. It analyzes the challenges faced by Tesco, including changes in consumer behavior, supply chain disruptions, and increased operational costs. The study explores how Tesco adapted by implementing e-commerce solutions, prioritizing safety measures, and adjusting its workforce. It further investigates the strategic decisions made by Tesco to maintain its market position and address evolving customer needs during and after the pandemic, providing insights into the resilience and adaptability required in the retail sector amidst unprecedented global crises. The research uses both secondary and primary data to provide a comprehensive overview of Tesco's response to the pandemic.

Title: The effect of
COVID-19 on the
retail industry. A case
study of TESCO

Table of Contents
INTRODUCTION......................................................................................................................4
Research Background.............................................................................................................4
Research Aim.........................................................................................................................4
Research Objectives...............................................................................................................5
Research Questions................................................................................................................5
Literature Review.......................................................................................................................5
Impact of the pandemic on various retail companies and outlets in UK...............................5
Strategic and operational challenges faced by Tesco amidst the pandemic...........................7
Ways in which Tesco overcame the pandemic using strategic action and change in its
operations...............................................................................................................................8
Discussion of the secondary and primary research....................................................................9
Research methodology...........................................................................................................9
Research Philosophy..............................................................................................................9
Research Method..................................................................................................................10
Data collection method........................................................................................................10
Ethical consideration............................................................................................................11
Limitation.............................................................................................................................11
Critical review of the results of the research............................................................................11
Recommendation and action plan............................................................................................17
CONCLUSION........................................................................................................................20
REFERENCES.........................................................................................................................21
Books and Journals:.............................................................................................................21
Online:..................................................................................................................................22
APPENDIX..............................................................................................................................24
Questionnaire.......................................................................................................................24

INTRODUCTION
Research Background
Today’s business environment is becoming complex in nature as every day there are
many external environmental factors which provide a direct or indirect influence on
organisation. It becomes necessary for organisation to find out the external environment
factors and analyse them so that they are able to take right measures (Grané, Albarrán and
Merchán, 2021). The current example of external environment factor is COVID-19 that
provided a severe impact on each and every sector. It is found that the most affected sector is
retail sector or industry. It is identified that the drastic changes caused by COVID-19 in the
external environment provided various effects on business in the retail industry. This report
aims to analyse the impact of a pandemic on the retail industry with a special reference to
Tesco. Tesco is a British multinational organization that currently runs the business not only
in one country but in many countries. They are facing many complexities due to the
pandemic which will be examined in the report.
It is necessary for an organisation to understand the impact so that they are able to
analyse how much the external environment becomes drastic for the company. It is found that
due to the government's request, the retail business handles all the daily and food necessities
such as supermarket stores which remained in good condition. But retailers which have
deemed known essential goods and services such as apparel and home appliances stagnated.
It is found that COVID-19 pandemic provided a negative impact on the sales of company
(Impact of the coronavirus (COVID-19) pandemic on retail sales in 2020, 2021). This is
necessary to understand that the retail industry is an important part of the UK economy as it
contributes almost 5.1% of GDP in the UK. Due to the imposition of long-term restrictions
and social distancing, the retail industry has been impacted which results in changes in goods
and services that are consumed by consumers. It is identified in 2020 that the total retail
volume decreased by 1.9% 2019. It was the largest annual fall in retail sales on record. This is
the reason for choosing this topic. This research will helps an organisation to critically
analyse the impact of pandemic.
Research Aim
The aim is to analyse the impact of the COVID-19 pandemic on strategic planning and
operations of UK's retail industry using Tesco as a case study.

Research Objectives
1. To analyse the impact of the pandemic on various retail companies and outlets in UK
2. To examine the strategic and operational challenges faced by Tesco amidst the
pandemic
3. To evaluate the ways in which Tesco overcame the pandemic using strategic action
and change in its operations
Research Questions
1. What is the impact of the pandemic on UK's retail companies?
2. What are the strategic and operational challenges faced by Tesco amidst the
pandemic?
3. What are some of the ways which Tesco overcame the pandemic using strategic
action and operational changes?
Literature Review
Impact of the pandemic on various retail companies and outlets in UK
According to The impact of the global pandemic on the retail industry, 2021, the
second wave of endemic left all the countries devastated and shocked. When countries are
struggling for getting back to normalcy then the entire sector has an impact in unprecedented
ways. It is identified that pandemic increase E-Commerce and digital transformation which
create a paradigm shift in consumer behaviour. Due to the change in consumer behaviour
towards online shopping for essential and nonessential goods and services, it is identified that
organization needs to re-imagine and adapt for the delivery of customer experience digitally
and physically. According to the report of McKinsey, it is found at 96% of consumers have
now adopted new shopping behaviours. In this figure, 60% are expected to shift toward
online shopping and continue for a pandemic. At that time, consumers were forced to buy in
bulk which increase stocking as well as financial constraints. It is identified that the pandemic
situation is provided a negative impact on retailer seals as it increases The E-Commerce
business which reduces the sales of retailers. Those dealers who are not provided essential
goods were restricted to open their stores as only essential goods and services are permitted
to open their stores. It was a shock for the retail sector as the business was stuck. It is not only
provided on their sales but also provides a similar impact on their profitability. It is found that
due to decreases in sales and profitability company has to stop their business. There are many
organisations which are not started after the pandemic even after the post-pandemic
situations. They are not able to survive in the market because of the pandemic which provider

a severe impact on economic situations. There were many restrictions found in the retailers
which provided an impact on the business negatively.
According to Coronavirus: impact on the retail industry worldwide - Statistics &
Facts, 2021, There are many countries that are gradually lifting the restriction measures after
more than one year of highly infectious virus which they imposed for closure of non-
necessity stores and venues. Now countries are focusing on lifting a ban on large public
gatherings. It is found that due to the pandemic, the retail industry faces many substantial
shifts and the retail seals have already dropped between 2019 and 2020. It is found that there
are many sectors that have witnessed growth as increases in sales of consumer goods in
heavily affected countries such as Germany, the United Kingdom, Italy, and Germany. The
reason for the increase in the business because grocery stores were always remained open. It
is found that in the UK the online retail sales stayed in 2021.
According to COVID-19 and the retail sector: impact and policy responses, 2020,
consumer behaviour was changed due to social distancing as they are avoiding the stores.
This change found because of pandemic situation where they are restricted to go to stores and
because of it, they are facing many problems for goods and services. They are not allowed to
go anywhere and many stores were remained closed. Due to this, it is found that consumers
are shifting their priorities towards online shopping. This change in consumer behaviour is
make pressurising on organisation as they need to change the business world by digitally. It
becomes necessary for them tp transform the business by digitally so that they will be able to
offer goods and services online to the customers. It is also found that pandemic is not only
provide an impact on retail sector as it provide an impact on each and every sector which
were restricted to open or limited to meet with people. After pandemic, the situations are
become changed as now companies need to rethink for their business structure which will be
become very tough for organisations. To restructure of organisation is not an easy task as it
includes the drastic changes in all over the business. It requires lots of expert knowledge and
experience to implement and execute the plan.
According to Naseri, 2021, it is identified that pandemic is not only provide negative
impact on retail sector as it provides positive impact also. The positive impact was for the
companies that provides groceries stores. Groceries stores were remained open and they
found an increase in the sales because people have a fear to not meet the essential goods and
services in future due to restrictions in public gathering and social distancing.

Strategic and operational challenges faced by Tesco amidst the pandemic
According to Sathyanarayana, Shukla and Taghikhah, 2020, it is identified that Tesco
is facing many strategic and operational challenges due to pandemic situations. This is
necessary to understand both the challenges that faced by Tesco so that they will be able to
find the ways or solutions which assists them to achieve the goals and objectives. It is found
that after pandemic, it is not easy for companies to come back into normalcy as now
consumer behaviour and many activities are changed. To start their business after pandemic
situation is not an easy task for them. This is necessary to make sure by the organisation that
they should focus on analysing the strategic and operational challenges effectively which
assists them to give an overview of all challenges.
According to Sayyida and et.al., 2021, strategic challenges are concerned with the
pressure that provide a decisive influence on likelihood of organisation’s future success. It is
found that pandemic is providing many strategic and operational challenges to Tesco. There
are many challenges are identified which provided an impact on Tesco due to the pandemic.
The first challenge for the company was to acceptive the external environment situations of
the team member of the organisation. It was not an easy task for their organization because
normally people are not able to accept changes in the organisation so how they were doing
that. They were not accepting the truth that the company was closed its stores and the one
needed to work from home. It was a strategic challenge for the company because employees
were not in a position to make any decision to work from home (Khaled and et.al., 2020).
They are unable to align the goals with the current situations. Tesco has an aim to become the
leader in the world but because of the pandemic situation the situation has become bad and
they were not able to survive in the current market so how they would align the goals and
objectives with the current situation of the market.
According to Debnath, 2020, they are also facing a challenge of poor goal setting. It
was a strategic challenge for Tesco as they were not in a situation to make goals for the
company. They got shocked because of the locked-down and restrictions of the government.
They were not even able to set goals for the current situation because forcibly they need to
accept the situation. It was found to be a very tough time for Tesco as it was the largest
retailer in the United Kingdom which got shocked because of the pandemic situation. There
is a continuous decline in growth and turnover because consumers have not been in a
situation to accept the change (Guan, Liu and Cheng, 2022). It was a very difficult time for
them. In addition to this challenge, organisations were unable to track their progress because

actually, they are not doing any progress due to. Even their sales and profits were decreased.
According to the newspaper of business standard, it was found that UK supermarket giant
Tesco sees profit dented by COVID-19. Due to the pandemic, Tesco said that the profits are
led by a 5th over the past year which was not expected by them. It increases their cost such as
the hiring of more staff members. The profits of the company were just led to 825 million
pounds in February as compared to the previous year of over 1 billion pounds. It is also
identified that Tesco has hired almost 50000 temporary workers during the pandemic
situation and among 20000 have joined permanently (UK supermarket giant Tesco sees profit
dented by Covid related costs, 2021). This type of cost was increased. The company has also
increased its cost for making sure to keep safe and secure stores. At the same time, it is
identified that there are many organisations that were financially supported by the
government for the purpose of food retailing but some of the organisations give the money
back to the government due to an increase in sales during the lockdown. Similarly, fit Tesco
benefited from a jumping demand for groceries. It is identified that there is an incredible
strength and agility found in Tesco during the pandemic.
Ways in which Tesco overcame the pandemic using strategic action and change in its
operations
According to Liu and Rabinowitz, 2021, Tesco has faced many challenges in its
strategic and operational activities. It is necessary for them to cope with the challenges. For
that purpose, they adopted some ways which help to overcome the challenges. Need to focus
on optimizing their existing systems in order to meet the challenge as during pandemics the
out-of-stock is increasing. This can be only done with the help of optimizing existing systems
which they need to create for saving the environment for the customers and employees.
It is identified that one of the proactive business responses to a pandemic is to offer
similar products and services buy an organization to the consumers with the help of an online
channel. This is an important way to overcome the pandemic situation by using strategic
action and changing its operation (Grané Chávez, Albarrán Lozano and Merchán, 2021). This
way includes the digitalization of physical products which becomes the need of the current
market. It drives the changes in operations and implemented this step strategically in the
market. It requires restructuring the whole business transaction. That means that Tesco needs
to change the way of selling their productions services because they are selling their
production services with physical stores. Due to this step or way, the organization needs to
overcome the pandemic situation which required changes in operation activity. The need to

include IT experts so that they are able to use the technologies in an effective way. It is
identified that COVID-19 is dampening the demands of many production services which
results in the underutilization of the infrastructure of the company. It is necessary to test for
to use of the same infrastructure with different products because there are many products in
services demand which were declined so they should provide the same infrastructure but
include many different products.
It is necessary for supermarket stores to make changes in their operational activities
and take decisions strategically so that they are able to overcome the challenges of a
pandemic. It is very important for them to take the right decision because every single
decision will be impacted the organization (George, Lakhani and Puranam, 2020). There is
one way that helps them to cope with the challenges is to make a strategic plan for digital
transformation that helps them to run their business with physical and online stores. It is
found that online stores are become very popular because of the pandemic so they need to use
this way in order to overcome the challenges. They should also provide additional benefits to
those products which are not selling due to the pandemic. They should use the buy one get
one free offer and that would be a method in which they also need to use social media tools.
Social media is becoming one of the marketing tools which is used for the purpose of
increasing awareness of products and services in the market. In this way, the company is able
to overcome by using strategic action and operational change. They need to optimize their
operations and critically analyse each and every process that needs proper action.
Discussion of the secondary and primary research
Research methodology
It is important to know that a researcher should use research methodology which is
the procedure a technique that is used for the purpose of identifying, selecting, processing,
and analysing the information related to the topic (Nanda, Xu and Zhang, 2021). It is
necessary for the researcher to use the right research methodology so that their readers are
able to critically evaluate the overall reliability and validity of the study. The research
methodology includes a research onion. It involves a research philosophy, research method,
data collection method, ethical consideration, and limitations of research.
Research Philosophy
Research philosophy is found to be a phenomenon or a way to believe people about a
particular topic. It includes four types of philosophy that are positivism, realism,

interpretivism, and pragmatism. For this research, pragmatism research philosophy is found
to be effective because it provides mixed or multiple method designs and is also suitable for
quantitative as well as a qualitative research method.
Research Method
It is necessary for a researcher to use the right research method so that they are able to
analyse the topic in a detailed manner. The researcher should make sure about the readers
who read their research. They need to make sure that they used to write research method
which can understand by readers. For example, if the readers are the general public, then they
need to make sure to use an easy research method that helps to analyse by them and
understand the topic in an effective way (Kabir and et.al., 2020). There are two types of
research methods which include quantitative and qualitative research methods. The
quantitative research method is the type in which the researcher is mainly focusing on
numerical statistics and use in the research paper in the form of graphs and tables. It is
important to note that quantitative should provide all the necessary information to the readers
so that they can understand the topic effectively and efficiently. On the other hand, the
qualitative research method is the one in which the researcher is focusing on non-numerical
data which includes a focus on the information obtained and extract from first-hand
observations, artifacts, and Focus groups. In this type of research, the researcher will use a
quantitative research methodology.
Data collection method
Data collection is an important step for researchers in which they need to focus on
finding the method for collecting the data to analyse the topic in a detailed manner. It
includes the important type of data collection methods data primary data analysis and
secondary data analysis. Primary data collection is concerned with fresh hand data. The
primary data collection method is found to be important as it provides accurate information to
the researcher. It is identified that the primary research data collection method is found to be
expensive as well as time-consuming (Goswami and Chouhan, 2021). Primary data can be
analysed with the help of interviews, surveys, triangulation of data, observations, etc. The
secondary data collection method is an important one that focuses on identifying and
analysing the data from the already published journals and articles. Secondary data can be
analysed with the help of defining a research problem in detail. It helps to get data easily and
is also cheaper as compared to the primary data collection method. In this research, the
researcher used both data collection methods so that they are able to analyse the topic in an

effective way. In the case of the primary data collection method, the researcher used a
questionnaire. And for that purpose, the sample size is 40 that are selected with the help of
random sampling method. On the other hand, they used journals for writing literature reviews
in the secondary data collection method.
Ethical consideration
It is important for a researcher to focus on ethical considerations which are necessary
for the purpose of completing the research in an ethical manner. Ethical considerations are
found to be a set of principles that helps a researcher guide the research design and practices.
It is necessary for the researcher to adhere the certain court of conduct during the research
special event their collected data from people. In the research considerations, they need to
make sure the protection of the rights of research participants, maintenance of scientific
integrity and enhance the research validity. It is necessary for the researcher to understand
that ethical considerations should ensure the understanding of the real-life phenomenon,
investigating behaviour, studying effective treatments, etc. This is necessary for them to
achieve the goals and objectives of the research.
Limitation
There are many research limitations that need to consider by a researcher so that they
are able to achieve their goals and objectives in an effective manner. It is important for an
organization to consider the research limitation as it minimizes the scope of research. This is
necessary for the researcher to identify and acknowledge shortcomings (Akinsomi, 2020).
Some important resource limitations are identified are the formulation of research aims and
objectives. It is necessary for a researcher to narrate the research aims and objectives so that
they are able to focus on the study. The next limitation is the implementation of the data
collection method which required expensive experience in primary data collection. The third
research limitation is sample size which depends upon the research problem's nature. If it is
found that research sample sizes are too small then the statistical test or not able to identify
the relationship within the data set. Scope of discussions is also an important imitation in
which are research and need to describe that what is the scope of research.
Critical review of the results of the research
Findings:
Q1. Do you understand the external environment factors? Frequency
a. Yes 30

b. No 10
Interpretation: From the above observation, it can be concluded that 30 participants out of
40 understand the concept of external environment factors. It is necessary for each
organisation to understand the external environment factors as they will provide an impact on
the organisation directly or indirectly (Debata, Patnaik and Mishra, 2020). If a company is
able to understand that external environment factor then it can easily deal with the
unprecedented changes.
Q2. According to you, is organisation get impacted by external
environment factors?
Frequency
a. Yes 33
b. No 07