U.S. grocery shortages deepen as pandemic dries supplies

Jan 14 (Reuters) – Excessive demand for groceries mixed with hovering freight prices and Omicron-related labor shortages are creating a brand new spherical of backlogs at processed meals and contemporary produce corporations, resulting in empty grocery store cabinets at main retailers throughout the US.

Growers of perishable produce throughout the West Coast are paying practically triple pre-pandemic trucking charges to ship issues like lettuce and berries earlier than they spoil. Shay Myers, CEO of Owyhee Produce, which grows onions, watermelons and asparagus alongside the border of Idaho and Oregon, mentioned he has been holding off delivery onions to retail distributors till freight prices go down.

Myers mentioned transportation disruptions within the final three weeks, brought on by an absence of truck drivers and up to date highway-blocking storms, have led to a doubling of freight prices for fruit and vegetable producers, on high of already-elevated pandemic costs. “We sometimes will ship, East Coast to West Coast – we used to do it for about $7,000,” he mentioned. “At the moment it’s someplace between $18,000 and $22,000.”

Birds Eye frozen greens maker Conagra Manufacturers’ (CAG.N) CEO Sean Connolly advised buyers final week that provides from its U.S. vegetation may very well be constrained for at the very least the subsequent month resulting from Omicron-related absences.

Earlier this week, Albertsons (ACI.N) CEO Vivek Sankaran mentioned he expects the grocery store chain to confront extra provide chain challenges over the subsequent 4 to 6 weeks as Omicron has put a dent in its efforts to plug provide chain gaps.

Consumers on social media complained of empty pasta and meat aisles at some Walmart (WMT.N) shops; a Meijer retailer in Indianapolis was swept naked of rooster; a Publix in Palm Seashore, Florida was out of bathtub tissue and residential hygiene merchandise whereas Costco (COST.O) reinstated buy limits on rest room paper at some shops in Washington state.

The scenario is just not anticipated to abate for at the very least a couple of extra weeks, Katie Denis, vp of communications and analysis on the Client Manufacturers Affiliation mentioned, blaming the shortages on a shortage of labor.

The patron-packaged items business is lacking round 120,000 staff out of which only one,500 jobs had been added final month, she mentioned, whereas the Nationwide Grocer’s Affiliation mentioned that a lot of its grocery retailer members had been working with lower than 50% of their workforce capability.

U.S. retailers are actually going through roughly 12% out of inventory ranges on meals, drinks, family cleansing and private hygiene merchandise in comparison with 7-10% in common occasions.

The issue is extra acute with meals merchandise the place out of inventory ranges are operating at 15%, the Client Manufacturers Affiliation mentioned.

SpartanNash, a U.S. grocery distributor, final week said it has grow to be tougher to get provides from meals producers, particularly processed objects like cereal and soup.

Shoppers have continued to top off on groceries as they hunker down at residence to curb the unfold of the Omicron-variant. Denis mentioned demand over the past 5 months has been as excessive or larger than it had been in March 2020 in the beginning of the pandemic.
Related points are being seen in different elements of the world.

In Australia, grocery chain operator Woolworths Group , mentioned final week that greater than 20% of workers at its distribution facilities are off work due to COVID-19. Within the shops, the virus has put at the very least 10% of workers out of motion.

The corporate, on Thursday, reinstated a restrict of two packs per buyer throughout rest room paper and painkillers nationwide each in-store and on-line to take care of the staffing scarcity.

Within the U.S., latest snow and ice storms that snared site visitors for hours alongside the East Coast additionally hampered meals deliveries sure for grocery shops and distribution hubs. These delays rippled throughout the nation, delaying cargo on fruit and greens with a restricted shelf life.

Whereas growers with perishable produce are pressured to pay inflated delivery charges to draw restricted trucking provides, producers like Myers are selecting to attend for backlogs to ease.

“The canned items, the sodas, the chips – these issues sat, as a result of they weren’t keen to pay double, triple the freight, and their stuff doesn’t go dangerous in 4 days,” he mentioned.

Extra reporting by Praveen Paramasivam; Enhancing by Vanessa O’Connell and Diane Craft

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