Why are some groceries still hard to find?
Roughly 10% of items are out of stock compared to 5 to 7% pre-pandemic
At the beginning of the pandemic, it was nearly impossible to find toilet paper, cleaning supplies or canned soup. Five months later, supplies of those goods are recovering, according to data from market-research firm IRI. But shelves remain generally emptier than they were before the pandemic, and it could get worse before it gets better.
As COVID-19 cases continue to rise in certain states, grocers are reporting a new increase in staples purchases that could lead to scarcity. The evenstronger demand for items such as baking ingredients and paper towels has made it tough for manufacturers to produce the items fast enough to keep shelves full.
“In-stock conditions at retailers are much better than two months ago but not anywhere where we would like them to be,” said Kellogg Co. Chief Executive Steve Cahillane. Still Spare Manufacturers of food, beverages, paper products and cleaning supplies ramped up production in the spring to help grocers get back in shape. During the peak shopping spree at the end of March, stores ran out of13% of their items on average. Now, roughly 10% of items remain out of stock, compared with a normal range of 5% to 7% before the pandemic.
That might not seem significant, but leaving shelves 90% full for half a year would cost the supermarket industry some $10 billion in lost revenue, according to research from trade associations.
For grocery shoppers, it means that someone with 20 items on their list would be out of luck on two of them. Shopper surveys have shown that if people can’t find what they are looking for, they will try a different store, and the retailer risks losing that customer for good.
Manufacturers and retailers are focused on making, delivering and stocking their topselling items. That can lead to out-of-stocks of niche or seasonal items, such as barbecue tools.
Other aisles have less stock because the sector simply can’t make enough. For instance, flour mills are behind on deliveries despite boosting production by as much as 40%.
As increases in COVID-19 cases cause states to pull back their reopening plans, grocery makers and retailers say demand is ticking up and they have little extra stock to spare.
“As soon as you saw that big states were having an issue, we absolutely saw an increase in orders immediately,” B&G Foods Inc. Chief Executive Ken
Romanzi said. B&G Foods, which makes Green Giant canned and frozen vegetables, said it blew through its inventory in the spring and is making as much as possible but hasn’t been able to stock up on extras to prepare for another wave of shutdowns. Other manufacturers such as KimberlyClark Corp., Campbell Soup Co. and General Mills Inc. have also said they haven’t been able to rebuild inventories because of the strong demand. Sticker Shock Prices for food and household goods also surged during the hardest-hit months of the pandemic because manufacturers and retailers dramatically cut back on discounts. Instead of 2-for-1 deals to encourage people to buy more, they implemented purchase limits on hot items such as pasta and paper towels.
Retailers say promotions have picked up again this summer, helping average price increases slow from May, according to IRI data.
Overall, store prices remain about 5% higher on average than a year ago, IRI says. Typically, inflation would result in a roughly 2% increase.
A few categories are offering more discounts than usual. Grooming-supply companies, for instance, are trying to boost sales because people have stopped prioritizing their appearance regularly as they aren’t going to work or many social events. Sports and energy drinks also upped their deals during the peak of the pandemic when gyms were closed and people weren’t going to convenience stores as much. Down at the Factory Total U.S. manufacturing slowed during the pandemic as non-essential businesses were shut down. Factories making food and other items for grocery stores increased their capacity by anywhere from 10% to 40%. However, those producing large quantities for restaurants, schools and hotels reduced their output if they couldn’t switch to making retail-sized products.
In the end, factories making food, paper products and cleaning supplies reported significantly less disruption because of the pandemic than industries such as autos and appliances.