Royal Dutch Shell has warned it expects to take a hit of up to $800 million (£649 million) in the first quarter as the coronavirus crisis and an oil price war have sent the cost of crude plummeting.

The oil giant said it expects "significant uncertainty" around oil prices and demand as the Covid-19 pandemic wreaks havoc on the world economy.

Shell said it is bracing for an impairment charge of between $400 million (£325 million) and $800 million in the first three months of 2020 as it lowered its oil price outlook.

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The price of oil has crashed due to the pandemic and a price war between Russia and Saudi Arabia, with Brent crude having fallen to just over 22 US dollars a barrel after plunging 65% in the first quarter.

Shell said: "As a result of Covid-19, we have seen and expect significant uncertainty with macroeconomic conditions with regards to prices and demand for oil, gas and related products.

"Furthermore, recent global developments and uncertainty in oil supply have caused further volatility in commodity markets.

"The impact of the dynamically evolving business environment on first-quarter results is being primarily reflected in March, with a relatively minor impact in the first two months."

Shares in Shell rose 7% amid a wider bounce-back on the FTSE 100 Index amid hopes for a Covid-19 vaccine and after early signs the outbreak may be slowing in Britain.

Shell also gave assurances that its financial liquidity was "strong" and that is has secured another $12 billion (£9.7 billion) credit facility, on top of the $10 billion (£8.1 billion) at the end of last year.

Details of its first-quarter charge come a week after Shell announced plans to heavily cut operating costs and spending proposals to help mitigate the impact of the coronavirus outbreak and tumbling oil prices.

The company said it will reduce its operating costs by $3 billion to $4 billion (£2.4 billion to £3.2 billion) for the next 12 months.

It said it will also reduce its annual spending to a maximum of $20 billion (£16.2 billion) for 2020 from its previous expectations of $25 billion (£20.3 billion).

Shell said there will also be a material reduction in working capital as it said the actions are intended to "reinforce the financial strength and resilience" of the business.

Shares in the company have more than halved in the past two months as oil prices have continued to dive.

Full-year figures in January revealed a 36% drop in profits to $15.3 billion (£12.4 billion) for 2019 after a dismal performance in the final three months of the year.

March was the busiest month on record for supermarkets across Britain as shoppers rushed to stock up on vital supplies to see them through the coronavirus pandemic.

Grocery sales rose by a staggering 20.6% in the last four weeks, and 7.6% in the last 12, according to new data from Kantar, beating even Christmas shopping.

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Fraser McKevitt, head of retail and consumer insight at Kantar, said: "Retailers and their staff have been on the front line as households prepare for an extended stay at home, with grocery sales amounting to £10.8 billion during the past four weeks alone - that's even higher than levels seen at Christmas, the busiest time of year under normal circumstances."

Although grocery sales were high in the first two weeks of March, Britons increased their shopping in the middle of the month, with 88% of households visiting a grocer between March 16 and March 19, making an average of five trips each.

This meant 42 million extra shopping trips in only four days.
Shoppers have tended to focus on buying supplies more regularly, rather than massively increasing the amount they buy per trip. However, shopping trolleys have been filling up more as well.

The average household increased its spending by £62.92 over the last four weeks, with shoppers in London, where the virus hit first, spent a quarter more than they usually do.

Mr McKevitt said that shoppers will be even more dependent on supermarkets in the coming weeks, with restaurants and pubs closed across the country. This means that another 503 million meals will have to be prepared and eaten at home every week until restrictions ease.

Shoppers have also built up an extra £199 million stockpile of alcohol, a 22% rise, and spent 28% more on stock cupboard ingredients and frozen foods.

However, despite massive demand for deliveries, there has only been a minor upswing in online sales.

"Government advice may have been to get groceries delivered if possible, but limited delivery slots meant that only 14.6% of households received an online delivery in the past four weeks, up from 13.8% in March 2019 but probably well below actual demand," Mr McKevitt said.

He added that the panic buying has been "concentrated to a relatively low number of individuals" and this will taper off as supermarkets show they are able to keep restocking their shelves.

All 10 of the main supermarkets grew in the last 12 weeks, according to the Kantar data. German discounters Lidl and Aldi performed strongly, growing by 17.6% and 11% respectively over the last 12 weeks.

At 7.4%, Sainsbury's was the best performer of the traditional big four supermarkets. Tesco grew by 5.5%, Asda at 4.9% and Morrisons at 4.6%.

Iceland saw its sales up 11.7%, while the Co-op's convenience stores helped boost its sales by 9.4%. Waitrose saw its fastest growth since November 2013, at 7.5%.

Online-only supermarket Ocado, which was forced to take a days-long time-out as its website struggled to cope with the traffic, attracted 133,000 new customers in the last 12 weeks, with sales growing 12.5%.

Concerns have been raised that UK lockdown restrictions during the coronavirus outbreak could be "disastrous" for the brewing industry in Scotland.

Pubs and restaurants were told to shut by the Prime Minister as part of measures to try to stop the spread of Covid-19 on Friday March 20.

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Several breweries have reported a surge in online sales since the restrictions were introduced but many expect stock to go to waste and are concerned about being able to survive.

Michael Gladwin, operations director of Black Isle Brewery, based near the Highland village of Munlochy, said: "It's been massive - we are 95% shutdown, we're having to rely on online sales of stock we have already produced.

"Probably 95% of our income has disappeared. There are no draught sales whatsoever - all that stock goes to waste."

The brewery operates a number of bars, which Mr Gladwin said had benefited from the rates relief brought in by the UK Government.

He also praised measures such as the worker retention scheme.

Mr Gladwin added: "Up until the point we were told to close our doors - quite rightly - we did have some working capital.

"We can probably make it through the three months and after that we are looking at loans.

"I understand it has been very very difficult for smaller brewers. It's pretty disastrous for us and pub chains alike."

Midlothian-based Stewart Brewing had to shut two of its bars as a result of the measures but has had a "massive uplift" in online orders.

Social enterprise and beer brand Brewgooder, based in Glasgow, has launched a scheme in which people can donate a drink to NHS staff as a thank-you for their work during the pandemic.

Tennent's welcomed breweries and distribution centres being able to remain operational during the pandemic.

The firm has also introduced steps to help support licensed premises that may struggle during the outbreak restrictions.

Kenny Gray, Tennent's managing director said: "We have initiated further measures following the announcement that hospitality outlets must close.

"These include committing to a full credit or a swapping of old for new on kegs of Tennent's beers and ciders on the recommencement of normal trading.

"Given the cessation of trade in the on-trade and impact on cash flow, our account managers are reviewing each customer's account on an individual basis on how we can support during this period.

"We have set up a dedicated team to address customer concerns as well as help with advice on accessing Government support."

He added: "The coronavirus outbreak is a complex and rapidly evolving situation, however, we are committed to working with our customers to continue to look at all measures we can put in place to provide assistance to the industry during this difficult period and beyond."