Ocado warns product availability being impacted by COVID-hit suppliers

LONDON (Reuters) - British online supermarket Ocado has become the first major food retailer to warn that the availability of some products is being impacted by COVID-19 pandemic related staff absences in its supply chain.

Deaths from the virus have now exceeded 81,000 in the United Kingdom with more than 3 million people testing positive, and a new variant of the disease is surging through the population, with one in 20 people in parts of London now infected.

With more staff off sick or forced to isolate some grocery suppliers are having to consolidate their lines.

“Staff absences across the supply chain may lead to an increase in product substitutions for a small number of customers as some suppliers consolidate their offering to maintain output," an Ocado spokeswoman said.

Ocado has seen sales soar since March as the pandemic has generated huge demand for home delivery of groceries.

Supermarket groups are also concerned that new customs procedures as part of Britain's post-Brexit trade deal with the European Union could impact supplies.

Last week, Sainsbury's and Morrisons, Britain's second and fourth largest supermarket chains, said goods were flowing from continental Europe so far.

However, they cautioned that traffic volumes won't be back to normal levels until the third week of January so the real test of new customs procedures would come then.

(Reporting by James Davey, editing by Estelle Shirbon)