Supermarkets all over the United States are preparing for shortages of popular products. They are forced to change how they operate to deal with the persistent shortages during the supply chain crisis.
Some of the most prominent changes include expanding their storage space to allow them to stock up on more goods, curbing discounts or getting rid of them entirely to deter consumers from purchasing too much of a certain item.
"You don't want to promote when you can't fill the products," said Neil Stern, chief executive of Good Food Holdings LLC, an operator of grocery chain Bristol Farms. Stern and other executives pointed out that consumers find it easier to substitute products or switch brands when their favored products do not have huge discounts on them.
One of the main problems many supermarket executives have is that they are unable to predict which products will run short from week to week.
Some industry experts who spoke with the Wall Street Journal noted that stores could run low on Nutella spread on one week and Prego pasta sauces or Pringles potato chips the following week. These shortages are occurring even though many manufacturers are increasing production to meet the heightened demand for their products.
"I never imagined that we'd be here in October 2021 talking about supply chain problems, but it's a reality," said Vivek Sankaran, chief executive of grocery company Albertsons during a conference call last month. "On any given day, you're going to have something missing in our stores, and it's across categories. The fact is, it's like whack-a-mole."
Many food manufacturers are struggling with labor shortages, a lack of hard-to-find raw materials and are experiencing difficulties shipping out their products.
Those who are not able to properly stock up their stores are forced to figure out alternative options, including finding substitutes for out-of-stock items. Some stores have become so desperate that they are covering up empty shelves or using cardboard cutouts to hide gaps left in their stores by supply issues.
"What orders showed up? And who do we need to call? It's our battle every day," said Kristen Hanson, who deals with the merchandising for New York-based grocery Tops Markets.
Supermarket executives partially blame shortages on hoarding
Many industry executives are at least partially blaming their shortages on people buying too much of certain items. "People are hoarding," said Adnan Durrani, CEO and founder of food company Saffron Road.
"The problem is people buy more of the other products," said Arthur Ackles, vice president of merchandising and buying for Massachusetts-based supermarket chain Roche Bros.
These executives are blaming their customers for rationally thinking ahead and preparing for shortages even though evidence shows the supply chain crisis is being caused by a combination of labor shortages, inflation and transportation problems, among other factors. (Related: There's no such thing as "panic buying," only rational people wisely stocking up on strategic supplies in anticipation of further disruptions.)
In many supermarkets, store managers are preparing to deal with shortages of popular food brands and other staples to continue for at least the next few months, especially since the holiday season is coming up and customers are expected to make more purchases.
Tinglong Dai, a professor of operations management and business analytics at the Johns Hopkins Carey Business School in Baltimore, recommends that people buy their holiday gifts as early as they can to avoid possible holiday-induced shortages.
"Buy local, buy American. Shop for holiday gifts as early as you can, if you really have to get that perfect Christmas gift on time. Support local businesses and domestically made products," said Dai.
"We really need to support U.S. manufacturers and brick-and-mortar retailers if we care about the health of our supply chains."
Learn more about how supermarkets are dealing with the supply chain crisis by reading the latest articles at MarketCrash.news.
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