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Panic Buying Frenzy Triggers Massive Food Shortages As Chaos Sweeps Across Supply Chains
Grocers are blaming the new shortages on a fresh wave of panic buying and continued supply chain issues, reporting that the 2020 toilet paper wars are back in many of the country's supermarkets. As infection numbers rise, store shelves across the nation are getting increasingly barer, with consumers complaining that bread, meat, fresh produce, and shelf-stable items have become impossible to find. A Walmart spokesperson who remained in anonymity told CNBC that panic buying was seriously aggravating the problem of supply shortages, especially because every time shelves were restocked, 'consumers would wipe everything down in record time'. The source also said that the giant retailer is currently experiencing direct impacts of supply chain disruptions, including reduced transport capacity and warehouse worker shortages.
At the same time, in an attempt to fill in the gaps left on the shelves, supermarkets are turning to different, less popular brands than they normally would stock to at least provide some options for their customers. On the other hand, restaurants are having to downsize their menus to cope with a limited range of available ingredients while prices across the board go on a steady climb. As shipping bottlenecks and factory closures leave a toll on the food industry, restaurant and grocery leaders say that the combined pressures of inflation, low stock, and labor shortages are sparking major operational issues. "It's a confluence of all of the events," explains Bob Luz, the president of the Massachusetts Restaurant Association. "There's a shortage of truckers, a shortage of warehouse workers, a shortage of pickers, a shortage of meat-cutters. It's just wreaking havoc on the entire retail world."
Likewise, restaurants have been grappling with unavailable products "pretty routinely for months, not weeks. It's hard enough if you're shopping for a family, but imagine you have a menu you're supposed to deliver to the guests each week," Luz said. "For instance, all of a sudden chicken wings go out of stock. How does a restaurant go out of stock on chicken wings?" Given that Americans are eating more at home than they used to two years ago, consumer patterns have changed, and the gap between supply and demand has only grown wider. With panic buying and hoarding making a comeback at this point of the crisis, it means that inventories will remain tight in the first half of 2022, and prices will reach levels never before seen in modern history. Data from the Consumer Brands Association shows that U.S. groceries typically have 5% to 10% of their items out of stock at any given time, but right now, that unavailability rate is hovering around 20% in urban centers, and up to 35% in rural areas.
In a recent study conducted by business consultancy KPMG, 71% of grocery shoppers said they were ‘very concerned about shortages or stockouts,’ but only 35% of them were willing to switch brands when their favorite items are out of stock. For that reason, when retailers finally are able to restock their shelves, they’re reimposing purchasing limits of select items to prevent the panic buying frenzy from getting force. Costco was the latest to reintroduce temporary purchase limits on some items including toilet paper. But while big retailers are able to source more supplies and handle staffing challenges amid the worsening supply chain crisis, millions of small business owners are on the brink of bankruptcy.
A survey released today by the Small Business Association of Michigan exposed that 56% of small businesses in the country are reporting workforce shortages, while about the same rate is being overwhelmed by inflation, 59% are suffering from supply chain disruptions for over a year. And altough 70 percent of businesses are increasing wages to attract and maintain employees, 66 percent of them are find it hard to maintain the staff. Grocery stores can close if labor and product shortages intensify, warned Calley. “If the situation worsens, some grocery stores won’t be able to stay open, threatening food security in rural and remote areas that rely on a sole independent grocer,” he said. Sadly, chaos seem to be the new normal for the U.S. supply chain. And the problems we’re witnessing right now will have huge repercussions in the months ahead. The worst is yet to come, and if you want to keep updated with the latest developments of this ravaging crisis, don’t forget to leave a thumbs up on this video and subscribe to our channel to get our latest notifications!