Retailers expect beef shortage to be short-lived
Expects things to stabilize soon
Long hailed as the go-to protein for dinner, the United States continues to grapple with a recent beef supply shortage.
Pork, too, is becoming harder to come by – and more expensive when consumers can find it.
As dozens of meat packing plants across the country have temporarily ceased operation amid coronavirus outbreaks, many retailers have begun feeling the pinch. Fast-food titan Wendy's has been hit particularly hard, prompting the company to announce earlier this week that some of its menu items will be “temporarily limited at some restaurants.” Kroger, the nation's largest supermarket chain, has instituted quantity limits on the amount of beef and pork. “At this time, we've added temporary purchase limits on fresh ground beef, poultry and pork,” a Kroger spokesperson told The Commercial Appeal, “to ensure all customers continue to have access to these products.”
Those that have not experienced interruptions in the supply chain have been forced to increase prices on the inventory they're able to stock. The indication, however, is the effects of the ongoing pandemic aren't forecast to linger much longer. Chuck Hogan, co-owner of Charlie's Meat Market in Memphis, hasn't had any trouble with filling his shelves so far. He said he has had to raise prices – in some cases, by upwards of $2 a pound – but expects things to stabilize soon.
“In this case, you've got and have had consumer demand in record highs,” he said. “To the point where people are concerned they won't be able to get any, so they're buying all the can. Then, losing anywhere from 15-20 percent with the meatpackers, that creates tightness in the market. So, between the demand (increase) and the supply (shortage), it's causing the prices to go up.
“(But) my vendors are telling me that in about two or three weeks this will all be settled down.”
Wendy's agrees. CEO Todd Penegor said on an earnings call Wednesday the company will likely have to weather a "couple of weeks of challenging tightness that we'll have to work through.”
Steve Jeffers, who owns and operates six Mcdonald's locations in the Memphis area, said Wednesday the world's largest fast-food chain has not experienced any significant problems related to the meat shortage in the United States. But, he added, Mcdonald's has recently gone to “controlled allocation” in an effort to ensure it doesn't run into similar issues as some of its primary competitors.
“Beef, bacon, pork – those things are in short supply across the country,” said Jeffers, who has worked for Mcdonald's in some capacity for nearly five decades. “Of course, there are no guarantees, but we feel confident we'll be able to get through this. Our distribution centers electronically monitor our inventories and they'll only send us what we need based on our sales and current inventory levels. It's a very intricate system, something I think is state of the art in the industry.
“But we feel we can meet our sales demands based on projections as long as we stick to controlled allocations.”