Since the beginning of the pandemic, the market in general has been facing great demand for certain basic consumer products while there is still a shortage in some points of sale. Now those who are experiencing the lack of certain products, such as paper towels and cleaning supplies, are the small grocery stores.
Grocery stores and small local markets say the reason for this is that the main suppliers of consumer products, which already face limited supply and high demand, are prioritizing larger customers, such as the retail chains Amazon and Wallmart, according to CNN Business.
The lack of these products on the shelves, according to small traders, ends up causing loss of customers and, according to Christopher Jones, senior vice president of government relations and advisor to the National Grocers Association, this is not a recent problem. Even before the pandemic, independent grocery store owners received notifications from suppliers that they were unable to obtain specific products or items available from major chains. “What’s happened during the Covid pandemic is really this issue has been magnified,” he said.
Still according to CNN, there is no publicly available data tracking products out of stock in small and large stores, however Burt Flickinger, a supermarket consultant for the Strategic Resource Group, said he and his team visit stores across the country every week and found in the pandemic that chain stores “from afar” have a better supply than independent stores.
“Supercenters and the wholesale clubs are getting far more product more frequently,” said Flickinger.
Independent grocery stores usually buy their products from small and medium-sized wholesalers, who have relationships with major manufacturers of consumer products. However, the manufacturers’ biggest customers are large retail chains, which usually buy directly from them.
The purchasing power of major retailers makes them a priority for manufacturers, said Rudolf Leuschner, associate professor of supply chain management at Rutgers University.
Tom Madrecki, vice president of supply chain for the Consumer Brands Association, which represents the leading manufacturers of consumer products and food, said the pandemic has affected supply chains and made it a challenge for retailers of all sizes to obtain high-priced products. demand.
“It’s the reality that some folks are bigger than others, and we’re going to work with with everyone and try to do things fairly,” he said.
Some wholesalers spoke to CNN on condition of anonymity to avoid damaging their relationship with suppliers and said that some consumer product manufacturers have canceled purchase orders from wholesalers serving independent grocery stores or have restricted the number of products they can buy.
According to a distributor that supplies independent grocery stores, between July and January, it received 52% less boxes of Lysol tissues, 21% less Clorox tissues and 40% less Reynolds foil packaging than in the same period last year, although the demand has risen in these categories.
“We’re now getting about 75% of the product that we order from the CPG companies if we’re lucky,” said another wholesaler. Prior to the pandemic, it was 97.5%.
A spokesman for Clorox said in an email to CNN that the company was taking several steps to respond to demand that has increased by up to 500%. It is shipping a record number of wet wipes during the current quarter, adding additional manufacturers, and launching a new line of wipes at an Atlanta facility, according to the spokesman.
“We still have work to do” to meet demand, the spokesperson said. “We continue to be upfront and transparent with our retail partners in terms of the principled choices we’ve had to make in the face of unprecedented demand.”
Reynolds and Reckitt Benckiser, the parent company of Lysol, did not respond to request for comment.
Independent grocery stores say they are feeling the effects. Robert Rybick, CEO of Geissler’s Supermarkets, which owns eight stores in Connecticut and Massachusetts, said that when it comes to essential paper products, he is struggling to provide the same options as larger chains.
He said he is only receiving packages of 24 of these products from his wholesaler, and most tend to be unbranded items. It also doesn’t have the same variety as the larger chains, which usually have four and 12 packs as well. This hindered their ability to attract customers on a tight budget, who often cannot afford to pay for larger sizes, he said.
“On paper and cleaning supplies, we just couldn’t compete with big box stores,” he said.
Read the full story on the CNN Business website.