Grocers are stocking up to prepare for a possible surge in sales amid a second wave of the COVID-19 pandemic, as well as the holiday rush, reported The Wall Street Journal (Sept. 27).
Food companies are also accelerating production of their most popular items so they won’t be caught unprepared in the event of another surge.
For example, Southeastern Grocers LLC secured holiday turkeys and hams over the summer—months before it usually does so—while grocery wholesaler United Natural Foods Inc. loaded up on extra inventory of cranberry sauce, herbal tea, and cold remedies.
Associated Food Stores also started building “pandemic pallets” of cleaning and sanitizing products so that it always has inventory in its warehouses, according to Darin Peirce, BP of retail operations. “We will never again operate our business as unprepared for something like this,” he said.
Ahold Delhaize USA, SpartanNash, and others say they are buying more food as soon as they can, stocking warehouses with wellness and holiday items. Many retailers are also expanding distribution capacity, augmenting warehouse space, and modifying shifts.
In March, “we didn’t know what we didn’t know,” said Chris Lewis, EVP of supply chain at Ahold Delhaize’s retail business services. The owner of Giant and Food Lion already has its holiday inventory in its warehouses. It is also storing 10% to 15% more inventory than it did before the pandemic.
At the beginning of the pandemic, grocery stores were focusing on stockpiling weeks of supplies for shoppers, but now food sellers are focusing on the long-term, aiming to stockpile supplies for months instead, reported CNN Business (Sept. 27).
However, some items—such as canned vegetables and paper towels—remain hard for stores to obtain and manufacturers are worried they will lose production capacity if infections break out among workers or if other issues prevent people from working.
Hormel has 24% less inventory than a year ago, according to CEO Jim Snee. Its bacon, pepperoni, Skippy peanut butter, and SPAM canned meat could run short if COVID cases among workers interrupt production again.
Kruger Products is also concerned about a second wave of the coronavirus as it indicated supply of paper towel is “very tight” across North America, reported CBC (Sept. 21). Kruger cut back on the SKUs produced to maximize production of key products, started running some machines at a new Sherbrooke facility, and is pushing to have that facility fully operational ahead of the originally planned launch in Feb. 2021.
Additionally, Procter & Gamble reported a massive surge in sales of Bounty paper towels in July as customers cleared them off the shelves, while Clorox said consumers will continue to see a shortage of its wipes and other products into 2021 because of overwhelming demand.
A definite needs exists for retailers to be ready as more than half of shoppers do plan to stock up on groceries if another coronavirus-related shutdown occurs, according to data from Acosta.
“As COVID cases continue to rise, most shoppers believe we’re headed for another shutdown and plan to respond accordingly, so retailers should be prepared for a new surge in stocking up,” said Darian Pickett, CEO of North American Sales at Acosta.
Acosta’s research found 67% of shoppers think another shutdown is extremely or somewhat likely to occur.
