UK supermarket giant Tesco has said the estimated cost of the COVID-19 virus on its business could be as high as €1bn.

Releasing results for its 2019 financial year on Wednesday, Tesco said it estimated the added cost of managing the COVID-19 virus, by increasing employee numbers at its stores and distribution centres as well as increased store expenses such as delivery, is between £650m (€740m) and £925m (€1bn).

In the first few weeks of the COVID-19 crisis in the UK and Ireland, Tesco said consumer panic buying led to a 30% spike in sales

However, while the coronavirus has increased costs for Tesco, the UK’s largest supermarket said these costs would largely be offset by relief on business rates, along with increased sales of food, provided that society returned to normal by August.

In the first few weeks of the COVID-19 crisis in the UK and Ireland, Tesco said consumer panic buying led to a 30% spike in sales and cleared supply chains of certain items.

However, panic buying has now stabilised and Tesco says its sales volumes have returned to normal levels.

For 2019, Tesco reported a 1% fall in sales to £56.5bn

The supermarket said it had increased its online delivery service capacity by 20% to meet the increased demand for online shopping, but added that there is not enough capacity to supply home delivery to the whole market. Tesco said 85% to 90% of all food shopping will still require a visit to its stores.

For 2019, Tesco reported a 1% fall in sales to £56.5bn (€64bn). Despite the fall in sales, the group’s operating profit from retail sales grew by 15% last year to £2.8bn (€3.1bn), as Tesco widened its profit margins to 4.4%.