I am not an expert on viruses or their spread and have no knowledge of how/when/if Covid19 will develop in the UK. But I have done some work on retail supply chains and however it develops they are potentially about to be tested in a variety of ways.
On the 2nd March, the Guardian ran a story about the preparations that food retailers were making about keeping the country fed if Covid19 struck really hard. This was mainly based around one analyst’s note, which predicted empty shelves, panic-buying and food riots. On the 6th March the Government Minister, Matt Hancock said he had been in conversation with food retailers and supply was assured. Retailers immediately flatly denied any such discussions. Some have introduced their own limitations on purchases, as waves of ‘panic-buying’ appeared.
The UK Government at the time of writing are to announce what powers it will implement over the next month or more to ‘combat’ the virus. This could include no-go zones and forced curfews and isolation in the worst scenarios; lots of self-isolation and “institutional” closures in others. It is likely that, however things progress, some people will become very ill and die. We can hope that is a very small number, but even then that personal and human tragedy is the worst of all cases.
Nonetheless, there has to be consideration (by Government and retailers) of how the vast majority (hopefully) are kept alive – and thus supplied with the products they need (medicines for example) and fed. For retailers, many going through tough times, a wide spread of the virus is of course the very last thing they want. Sick, fearful or isolated customers don’t tend to want to spend and both the ability and desire to buy many products and services will be curtailed. Some products though will receive enhanced demand and panic-buying and warnings of profiteering already abound. Operationally in the worst case, retail management may themselves fall ill and retailers may have many staff unable or unwilling to work in shops. This may be the very real threat for supply chains and retailers generally. This is a financial/fiscal crisis for retailers and their workers (as well as the obvious personal health crisis). Some may not be able to recover without assistance.
So if people can’t/don’t want to go to the shops what happens? We have a relatively well developed home delivery service in grocery (and non-grocery) and for some sectors of the economy and the population, delivery to your self-isolation ward (home) will be the only/preferred option. For others click and collect may still be an option. However, that of course assumes the goods can be produced, delivered, picked and delivery drivers are available. The same will be true of home delivery food services such as Just Eat. Services to some institutions will need to be prioritised e.g. care homes, hospitals etc. But this will not be able to cover the whole population.
Others will venture out to local shops, assuming they can be re-stocked, and in some scenarios these will receive a boost of trade. But so much depends on the severity and spread of the outbreak, at national and local levels. And at this point there is so much we do not know.
We are already seeing some products run low and empty shelves in lines such as hand gel (and for whatever reason toilet paper). This is likely to get worse if (as) the virus progresses. Containment and then delay will provide some breathing space (sorry) for the supply chain to adapt and develop some resilience, but it will be hard. If production is affected of key products then there will be further problems. Covid19 is asking serious questions over how we can support and feed ourselves at times of crisis, and we may struggle to find equitable answers. Freeing up some of the restrictions on a temporary basis may help.
If there is delay in the spread and people are reassured that the bulk of products will flow as normally, then there should be no real issue for retail supply chains, except for exceptional products and serving those who are unable/unwilling to venture to stores. Provided that is, that enough employees and managers are available and are not isolated or looking after others. Patterns of behaviour may change but overall there should not be a problem of physical supply.
For retailers, supply chains work best when they are frictionless and/or there are limited fluctuations due to unexpected events. Volatility and oscillations in demand/supply test reliance of supply. The way around this is through smoothing mechanisms to even out demand – hence the firm based rationing starting (though this also helps in store). But, this is neither equitable nor sustainable and a broader national solution will be needed before long, if things progress to major crisis points as in one of the scenarios (see Italy).
For now, this is all speculation, though I am certain detailed scenario and business continuity planning is being undertaken. Time will tell how accurate or effective this is.
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