‘We Are Resilient’: Industry Confident Supply Challenges Can Be Met Amid COVID-19 Crisis

Despite heavy strains to operations and frenzied buying blowing holes in the shelves of the nation’s supermarkets in recent days, grocery industry leaders expressed confidence that their supply chains will catch up to demand as consumers adjust to the reality of food shopping in the coronavirus era.

Trade group executives from FMI and the National Grocers Association said they were encouraged by federal response to help ensure the viability of the supply chain, including the declaration of a state of emergency announced late last week and a call on March 15 with top federal officials. Joining President Donald Trump, Vice President Mike Pence, Secretary of the Treasury Steve Mnuchin, Secretary of Agriculture Sonny Perdue and other White House officials on the administration’s plans to address the COVID-19 outbreak were FMI President and CEO Leslie Sarasin, NGA President and CEO Greg Ferrara and additional CEOs of Walmart, Whole Foods, Wegmans, Costco, Publix, Aldi and Dollar General. Other food industry executives on the call included leaders from Campbell Soup Co. and Kraft Heinz.

Trump and Pence subsequently hosted a press conference the afternoon of March 15 from the White House briefing room, where they praised the nation’s grocery industry for keeping their stores open and stocked as best they can while asking Americans to only purchase what they need for an average weekly shop to ensure availability for others.

Grocery stores, in the meantime, were working to address the issue of customer hoarding that was diminishing supply at stores, including moves implemented among many chains to temporarily reduce store operating hours and institute purchase limits on items in high demand.

“We are resilient; our industry is working 24 hours a day to replenish and restock while ensuring the cleanliness of our stores and facilities,” Sarasin said in a statement. “We are seeking to be sensitive to the needs of all our customers and partners, including our WIC (Women, Infants and Children) and SNAP (Supplemental Nutrition Assistance Program) shoppers and the food banks our stores support.”

“While local, independent grocers are currently experiencing an unprecedented demand in store traffic and for product and goods,” Ferrara said NGA will continue “to work closely with the president and our federal, state and local officials nationwide to ensure the resilience of both the food supply chain and our local economies.”

Panic Buying Overwhelms Stores

Sources emphasized the food supply was not in danger but rather temporarily overwhelmed by panicked buying among shoppers worried about the effects of the coronavirus. This demand—which ramped up suddenly last week as the spread of the disease came into better perspective, consumers were urged to practice social distancing and stay in their homes, and hundreds of dining options such as restaurants closed—challenged a system designed to provide only enough to ensure steady supply. These systems, however, can adjust, and the supply of most items is not threatened.

Supermarkets, however, were hardly out of the woods as the danger of sick or quarantined workers—and a need to staff up to safely meet booming demand—remain challenges that presumably could grow in the weeks ahead.

Kroger Workers Diagnosed With COVID-19

The Kroger Co. announced over the weekend that two of its workers—a King Soopers employee in Colorado as well as a Fred Meyer worker in Washington—tested positive for the COVID-19 virus.

Kroger CEO Rodney McMullen, in a memo to employees March 14, said both associates were receiving medical care and recovering. “Upon learning of these cases, we partnered with state and local health experts, followed all sanitation and cleaning procedures, communicated with and supported our store teams, and with the support of the state governments, the stores remain open,” McMullen said. “We will continue to follow guidance from local, state and federal agencies, including the CDC (Centers for Disease Control and Prevention) and other health organizations.”

In the same memo, McMullen announced a new emergency leave policy allowing paid time off for associates diagnosed with COVID-19 and for associates placed under mandatory quarantine by their medical provider or public health authority because of COVID-19.

Walmart announced a similar policy last week after it was reported that a worker in Kentucky had been diagnosed with the COVID-19 virus.

“Our customers and communities are counting on us,” McMullen told employees. “In times of uncertainty, the Kroger family of companies is here. We ask that you continue to practice standard safety guidelines and follow the CDC’s preventive tips, including frequent hand washing and regularly disinfecting commonly touched areas.”

Reduced Store Hours—And Help Wanted

As previously reported, food stores are adjusting to supply chain challenges and sanitation concerns by reducing operating hours of stores, upgrading cleaning producers, and in many cases, shutting down self-serve food bars and in-store restaurants. The reduction in operating hours is providing stores a chance to restock and clean stores overnight, while also giving some frenzied workers a break. Numerous unverified online accounts of retail workers say their hours have been increased dramatically as supermarkets fight to keep stores open, clean and in-stock.

Kroger this weekend said it had immediate positions available across its stores, manufacturing plans and distribution centers, and intended to place candidates in jobs within days of applying.

Retailers are also preparing for increased demand for e-commerce and click-and-collect. Some retailers such as Southeastern Grocers, the Jacksonville, Fla.-based parent of the Winn-Dixie chain, was encouraging shoppers to consider a new “drop and leave” program to avoid personal contact with delivery workers.

Ahold Delhaize CEO Frans Muller in a statement praised the efforts of store teams. “Across the brands of Ahold Delhaize we serve a critical role in communities, ensuring people continue to be able to get the food and other necessary products they need for themselves and their families,” Muller said. “I am proud of this role but am keenly aware of the heavy responsibility this puts on associates’ shoulders in a time like this. On behalf of the entire executive committee, I want to say a special thank you to all our frontline associates who are going above and beyond to care for the people in their communities.”

Additionally, Muller said Ahold Delhaize’s family of stores “will no longer operate our self-serve deli bars. Instead, we will have prepackaged deli items available. As another option for our customers that are unable—or unwilling—to make it to our stores, our delivery services, to include a ‘drop and leave’ program to avoid personal contact, can provide you the products you need from the comfort of your home.”

Calling On Disaster Experience

Industry associations, including NGA and FMI, applauded the Trump administration for participating in a call on March 15 with food retailers, wholesalers and suppliers in which they said they received assurances of support during the crisis. Many likened the experience to a large-scale replica of previous industry response to natural disasters.

“I appreciated the opportunity to share with President Trump the important work that NGA’s nearly 9,000 members and their close to 1 million team members are doing to support and feed their communities during this challenging time,” said Ferrara, whose association represents the nation’s independent grocers.

Federal and state authorities are lifting restrictions on trucker hours—regulations typically lifted in times of natural disasters—to ensure better volume of deliveries to store, for example.

“Our industry has faced emergencies before, from hurricanes to earthquakes and fires to floods,” Ferrera said. “Grocers are experienced and prepared to continue serving their communities and employees as our members do each and every day. Our nation’s food supply and supply chain are very strong, well-stocked and will continue to work at the highest capacity to supply stores.”

A joint statement from the Retail Industry Leaders Association—a trade group representing mass retailers—and the National Retail Federation discouraged consumers from hoarding activities. Those organizations’ respective presidents, Brian Dodge and Matthew Shay, said such activity “contributes to the fear surrounding the virus,” and said hoarders with intent to inflate secondary markets for in-demand products should be prosecuted.

“Retailers—particularly grocery providers—are working with manufacturers, suppliers and government agencies to make certain essential products and services remain readily available to customers. Retail supply chains remain strong and retail employees are working around the clock to meet consumer demand,” Dodge and Shea said.

“If you don’t need an item in the next two weeks, leave it for someone who does. Hoarding and stockpiling creates unnecessary gaps between the time that someone who truly needs a product can find it back on retailers’ shelves,” they continued. “This is particularly important for our most vulnerable neighbors—the elderly and those who are struggling with other health issues.”