Suppliers Scramble to Meet Demand

Consumers should see more of the basics but fewer specialty products on store shelves.

March 17, 2020

ALEXANDRIA, Va.—As a result of panic buying, supermarkets are stripped of food and other essential items. In response, manufacturers are speeding up production of basic merchandise to meet the ongoing demand, reports Business Insider.

"The grocery supply chain is not going to shut down," said Doug Baker, who leads crisis management for the Food Marketing Institute (FMI), the trade group representing food retailers and wholesalers.

But that doesn’t mean every product and flavor of chips will be available. As factories move to round-the-clock operations, they are focusing on the highest priority items to address the unprecedented surge in demand, Baker said.

For example, instead of producing bleach in several different sizes and scents, they will limit production to the most popular. Exotic versions of certain food items may be halted to save production time. Typically, machines must be changed to produce a different product. "Manufacturers have also started allocating goods so they can ensure equal distribution across the country," he said.

Large retailers, such as Walmart, Publix and Kroger, are restricting purchases of toilet paper, Lysol sanitizing wipes and other in-demand products. Walmart, which gets more than half its U.S. revenue from grocery sales, has given store managers authorization to manage their inventory, "including the discretion to limit sales quantities on items that are in unusually high demand," a spokesperson said.

Retailers are reducing store hours to give busy employees time to restock and deep clean stores. Both retailers and manufacturers are working to ensure that they have enough labor on hand to produce and move supplies. Kroger, the largest U.S. supermarket operator, put out a call for workers on Sunday.

"This pressure—coming across the entire nation—is fundamentally different than regional emergencies that have been dealt with in the past," said Hilding Anderson, head of retail strategy at consulting firm Publicis Sapient.

Coronavirus Resources

NACS has compiled resources to help the convenience retail community navigate the COVID-19 crisis. For news updates and guidance, visit our coronavirus resources page.

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