Retailers Battle Continued Operations Challenges

Employee and supply shortages cause retail complications.

August 31, 2021

Delivery Truck Part of Supply Chain

ALEXANDRIA, Va.—Grocery-store chains say industry issues are arising weekly, driven by shortages of labor and raw materials, reports the Wall Street Journal, and some food manufacturers anticipate disruptions lasting into 2022.

Many grocery chains are left guessing whether they will receive deliveries on time and if they’ll be complete. That has some rethinking when and how to procure products, examining everything from carrying a limited number of package sizes or varieties to selling different brands.

Resin, aluminum and other raw materials used for packaging are running low, and many producers are giving priority to their most popular items. Plus, manufacturers often can’t produce enough items to meet demand.

Many retailers expect the flow of groceries to remain inconsistent for the near future. Walmart and some other big food buyers have reinstated penalty fees for late and incomplete orders that they paused last spring. But that hasn’t improved supply challenges, the Journal reports.

“Every day, overall, stores are ordering 10% more than what we can get for them,” David Smith, CEO, Associated Wholesale Grocers Inc., which supplies food for regional and independent stores nationwide, told the Journal. Big chains fare better, he added, because they make up a greater portion of manufacturers’ business and are receiving more than their proportionate share.

Don’t forget to register to attend the 2021 NACS Show October 5-8 at McCormick Place in Chicago and take advantage of the education sessions on category management, including the sessions Cold Vault in 2021: Trends and Takeaways and Private Label Trends on October 5, Determining the Perfect Product Mix on October 6 and Top Strategies for Transforming a Fragile Food Supply Chain and What’s New With Cannabis on October 7.