Welcome to winter 2022: Empty grocery shelves are back, and staffing is reduced by as much as half in some cases.
But the blame doesn’t fall completely on the surge of the Omicron variant of COVID-19.
Produce industry members also point to ongoing supply chain issues, high retail sales and extreme weather.
The economic fallout from the coronavirus itself has multiple layers: record infection rates, absences because of exposure and vaccine mandates turning labor away.
Retailer spotlight
“We, like other grocery retailers, are experiencing the impact of the latest wave in COVID-19 cases from an associate standpoint,” Jennifer Brogan, Stop & Shop’s director of external communications and community relations, said in a statement to The Packer and Produce Market Guide. “However, we have plans in place to ensure we continue to serve our communities through these challenging times.”
Quincy, Mass.-based Stop & Shop will continue to offer paid COVID-19 leave for its associates at more than 400 stores in the Northeast for up to 10 days, she said.
Supplier partners have been telling buyers and produce executives for supermarket chain The Giant Co. about their production and sourcing challenges, which are impacting what’s available in stores, said Ashley Flower, public relations manager for the Carlisle, Pa.-based company.
“Historic demand and a stretched supply chain have contributed to limited product availability in certain cases,” she said. “Many other factors, like ongoing labor shortages, limited availability of raw ingredients, freight and packaging constraints, and unpredictable weather events are beyond our control.”
Giant staff are working with suppliers to find alternative products when possible, but during this time, consumers may find a particular brand or variety is largely unavailable.
Like other retailers, The Giant Co. is also facing its own staff challenges.
“COVID is certainly impacting staffing levels,” Flower said. “The health and well-being of our team members remains our priority.”
Hiring efforts are ongoing, especially for the online grocery service, Giant Direct. The company is also cross-training teams, and in 2021, Giant increased starting wages for part- and full-time team members to improve employee retention.
The human resources department at Tops Friendly Markets has told Kathy Sautter, public and media relations manager at the Williamsville-N.Y.-based supermarket chain, that there’s been a “significant increase” in the number of COVID cases. This hurts operations because of associates having to be pulled out of work unexpectedly, she said.
“This has been especially true after the holidays, and we can attribute that to outside-of-work gatherings, similar to what we experienced last year,” Sautter said. “The ever-changing (Centers for Disease Control and Prevention) recommendations and state guidelines have also been a challenge to work through and execute, but we are continuously evaluating in order to maintain a safe working environment for our associates and shopping environment for our customers.”
Jeff Cady, director of produce and floral at Tops, said the produce supply at stores reflects what’s happening with smaller staffs, but it’s also impacting warehouse and transportation.
“We have had deliveries not show up due to drivers not being available and have had to cancel deliveries as recently as last week to some stores due to lack of warehouse personnel,” Cady said. “Certainly, (it’s) an unfortunate situation. We feel we are on the other side of it, but it has been a struggle.”
Government solutions
Many of these COVID-related challenges at retail and wholesale are rooted in the lack of labor, port congestion, input cost and road transportation, as well as some regulatory challenges, according to a statement on supply chain priority issues made by the International Fresh Produce Association.
The IFPA was formed at the start of 2022, unifying the Produce Marketing Association and United Fresh Produce Association.
For solutions, the IFPA is advocating for two pieces of legislation that will address some of these issues: the bipartisan Ocean Shipping Reform Act and the DRIVE Act. The first act reforms the port supply chain, and the second adds to the Infrastructure Investment and Jobs Act to enable qualified drivers younger than 21 to transport goods across state lines.
“Labor shortages are challenging all sectors of the economy today,” according to a Jan. 13 IFPA statement issued to The Packer and PMG. “IFPA is working together with other food sectors and retail partners to encourage government clarity on quarantine guidance to reduce the confusion in the marketplace keeping essential workers out of work. We also need continued regulatory flexibility to minimize further disruptions in the supply chain.”
Social media poll
The shortages in supermarket produce departments are drastic in some spaces, but spotty or nonexistent in others, according to responses to a social media poll conducted recently by The Packer and PMG.
“What I have seen in supermarkets since New Year’s in my local area has been mostly good conditions, but with some persistent out-of-stocks, coupled with issues with recalls on packaged salads,” Joe Watson, with IFPA, said on LinkedIn. Based in Newark, Del., Watson is IFPA’s vice president of retail, foodservice and wholesale.
So far this year, he’s noticed very little import fruit, especially from Chile, he said, but he did find cherries from Argentina.
He said his chats with in-store management have revealed that the biggest issue is the shortage of drivers at distribution centers, which is postponing or even canceling inbound deliveries. Product is making it to the warehouse, but getting out to stores has been problematic.
“In one case, a manager told me center store and fresh meat are prioritized over fresh produce deliveries from the (distribution center),” he said. “An opportunity perhaps for wholesalers to fill the gap until where applicable.”
One of the most commonly mentioned missing items of late has been packaged salads, followed by blueberries.
At supermarkets in Massachusetts, one responder on Instagram said she’s seeing shortages in grapes, packaged greens, blueberries, navel oranges and fresh meats. Another responder said he’s seeing no food shortages, but he’s seeing transportation shortages, which are just starting to affect the Hunts Point Produce Market, located in New York City’s Bronx borough.
Read more on how Hunts Point Produce Market weathers the storms and sunny days.
Delays between Christmas and New Year’s Day because of winter storms and truck shortages have meant lean shelves and older produce at the store. That’s according to Shay Myers, CEO of Owyhee Produce, as reported on his @shayfarmkid TikTok reel. Owyhee has locations in Nyssa, Ore., and Parma, Idaho.These delays are causing a backlog, he said.
“The supply chain is just kind of messed up with the stores, truck drivers and the holidays, and it’s going to continue for a few more weeks,” he said.
One retail buyer said on Instagram that she’s received red grapes one time out of five attempted orders, and a representative told her it was because of weather and sickness-based worker shortages.
Tony Sarsam, president and CEO of Grand Rapids, Mich.-based grocery distributor and store operator SpartanNash Co., said he’s seeing a tripling of cases in recent weeks among staff. That equates to about 1% of the company’s 19,000-person workforce reporting having the virus in recent weeks, compared with about one-third of a percent a couple of months ago.
No employees have been hospitalized because of the coronavirus by mid-January, he said.
“Like all retail companies right now, we are seeing supply chain pressures due to the labor shortage, so we are being creative with our ordering and mix,” Sarsam said. “While there are order delays from our manufacturers, we are creating solutions for our customers such as offering similar products or providing from our OwnBrands portfolio.”
Suppliers and manufacturers that handle labor-intensive, value-added and freshly cut produce are struggling dramatically with labor shortages and new inexperienced labor inefficiencies, he said.
Fresh Divide is SpartanNash’s workaround to that challenge. This division of the business packages much of the produce in-house at SpartanNash retail stores.
On top of less supply in product and labor, the demand for both is high. And unlike foodservice, retail sales have not been suffering.
Volume of produce sold was down 4.4% compared with last November, but volume sales were still 4.4% ahead of the pre-pandemic normal, according to a December report from IFPA and marketing research companies IRI and 210 Analytics.
Read about the USDA's outlook for food inflation for 2022.
Overall grocery store sales increased 9.4%, from $694.3 billion in 2019 to $759.7 billion in 2020, according to a U.S. Census Bureau report released Jan. 13. In that same time, e-commerce and mail-ordering skyrocketed by 35.2%, to $888.5 billion in sales — the largest year-to-year increase of any industry.