Empty grocery shelves return as sick employees, supply chain delays collide

This article explains.

Target stores’ bread aisles are nearly empty because of supply chain disruptions that continue in Washington State, U.S., on January 9, 2022.
Sarah Silbiger | Reuters

Supermarket shelves are empty again as employees get sick, and trucks arrive with full loads of groceries late.

It’s the latest result of the omicron variantThis is putting pressure on the workforce. Investors see the need to prepare for prolonged periods of high food, transport and labor costs.

The shares of the major grocery chains, including Albertsons, KrogerAnd Walmart fell Tuesday. After the company discussed the challenges in its supply chain and the inflated costs that it is seeing, Albertsons shares dropped 9.75% at $28.79 by market close. Even though Kroger raised its fiscal 2021 outlook, the stock plunged. Kroger’s shares dropped by about 3 percent, Walmart fell less than 1 percent.

The U.S. has seen record numbers of covid patients and hospitalizations as this highly contagious disease spreads. This country reported about 1.5 million new cases on MondayJohns Hopkins University has data that shows this. Hospitalizations have surpassed last winter’s peak, with 144,441 Americans hospitalized with the virus as of Sunday, according to data tracked by the Department of Health and Human Services.

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Workers feel the strain

Workers at supermarkets are suffering the same effects as omicron. Samantha Webster, the San Francisco Bay Area’s dairy manager for Safeway stores, helps to replenish coolers filled with butter, milk, and other items. Albertsons is the owner of Safeway.

She said that since early December more people have been forced to leave work due to getting Covid and close proximity with sick employees. From the 60 people in the store, she said that 15 of them are outright now.

According to her, Safeway is receiving fewer pallets from its warehouses. Additionally, there aren’t enough employees available to load them.

The dairy department has many gaps where once there was cream cheese or yogurts. The bakery aisle is missing fresh bagels, loaves and bread. Potatoes are also running out in the produce department.

Other aisles are filled with canned soups like clam chowder, but other kinds, like minestrone, didn’t arrive.

She said that shelves were becoming less and less useful. “One person can’t keep an entire department going.”

CEO says Covid prolonging out-of-stocks

Vivek Sankaran, CEO of Albertsons stated on the call that there has been low stock or missing products in certain categories at the grocery store for several months. The latest Covid case spike is prolonging some stock outages, he said.

He stated that he expected supply problems to be more solved as we enter this period. Omicron has made a little dent in that. So there are more supply challenges and we would expect more supply challenges over the next four weeks to six weeks.”

New coronavirus version is exacerbating worker shortagesYou can find them in all industries: restaurants, retail stores and even airlines. Leaders of companies are often forced to make difficult decisions like reducing service hours. canceling flightsClose down of stores. It is also starting to reflect in the sales figures. LululemonRetailer is one of the ones that has warned about the possibility that Fourth-quarter revenue and earnings will be below estimates. feels the effects of having reduced hours and limited staff.

Grocers may feel the pressure more as they are a low-margin company with less ability to pay overtime, raise wages or pass higher costs on to their customers. The money that shoppers spend is often less than others. There are several things to consider. child tax creditThe program that provided monthly payments to families was called ‘The Arrangements Program. It ended December.

Albertsons leadership stated that labor, ingredients and packaging costs had risen. Although the supermarket has seen some inflation in recent years, they said it has managed to maintain a steady price for essential goods that its customers purchase often.

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