Food Industry Analyst: 'Worst Part Is Over' For Supermarkets
A combination of factors in the COVID-19 outbreak has led to shortages on grocery store shelves over the past few weeks.
But after a few weeks of shelves being empty of toilet paper, flour and other items, national food industry analyst Phil Lempert said the industry is bouncing back.
“The supply chain is filling up. We are starting to see products filling those shelves,” he said. “I think the worst part is over as it relates to supermarkets."
The rapid spread of the coronavirus, plus hoarding by grocery shoppers, led to shortages initially, Lempert said.
A shortage of truck drivers and the concerns of farmworkers also contributed.
Lempert said the trucking industry has been dealing with a shortage of drivers for some time, as new drivers aren’t coming into the industry fast enough to replace retirees.
And he said undocumented farmworkers have been especially worried about the virus, as they often work close to each other in crews.
“If one person is infected, that means an entire crew can’t work,” Lempert said.
Although Lempert believes fully stocked shelves will return to grocery stores in the next month or so, worker health could be key in upending that prediction.
Some stores throughout the country are having to close because they have workers who contracted COVID-19. And outbreaks elsewhere in the supply chain are leading to concerns.
One of the biggest pork processing plants in the country has been shut down. Smithfield Foods made that decision after nearly 300 workers at a facility in Sioux Falls, South Dakota, tested positive for the coronavirus.
The company has not set a date to reopen the plant.
“The closure of this facility, combined with a growing list of other protein plants that have shuttered across our industry, is pushing our country perilously close to the edge in terms of our meat supply.” Smithfield President and CEO Kenneth Sullivan said in a statement posted on the company’s website.
Smithfield said the plant in South Dakota employs around 3,700 people and represents around 5% of U.S. pork production.
Future of supermarkets
Many of the changes prompted by the outbreak could be here to stay. They include spacing among customers waiting in checkout lines.
“Where you used to see five or six people in a row right up against each other, that’s not going to happen,” Lempert said.
Improved cleaning techniques and store maintenance implemented during the outbreak will probably continue once the pandemic ends, he said.
“We just need to learn from this that perhaps some of what we’ve gotten sloppy at needs to be improved.”
Lempert, who edits the website supermarketguru.com, expects an increase in contactless payments to keep supermarkets safe after the pandemic. Customers would be able to grab an item and walk out of the store, with the cost automatically deducted from an account.
Amazon has similar systems at Amazon Go stores throughout the country, and Lempert said the company is ready to license the technology to other retailers.
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