Albertsons' CEO Vivek Sankaran acknowledged that products are in tight supply during the company's earnings call with analysts Tuesday.
"I think as a business, we've all learned to manage it. We've all learned to make sure that the stores are still very presentable, give the consumers as much choice as we can get," Sankaran said during the call.
"While there is plenty of food in the supply chain, we anticipate consumers will continue to experience sporadic disruptions in certain product categories as we have seen over the past year and half due to the continued supply and labor challenges," said Greg Ferrara, the group's president and CEO.
In fact, labor shortages continue to pressure all areas of the food industry
, said Phil Lempert, an industry analyst and editor of SuperMarketGuru.com.
"From farms to food makers to grocery stores, it's across the board," said Lempert. "During the pandemic, these operations have had to implement social distancing protocols and they're not really built for that and it has impacted production."
And as the pandemic continues, many food industry workers are opting not to return
to their low-wage jobs at all.
An ongoing shortage of truckers
continues to slow down the supply chain and the ability of grocery stores to replenish their shelves quickly.
Much of the Midwest and Northeast has recently been grappling with severe weather
and hazardous commuting conditions. Not only are people stocking up on more groceries, that level of high demand coupled with transportation challenges is making it more difficult to transport goods in inclement weather, thus resulting in more shortages, said Lempert.
Not to mention climate change, which is an ongoing serious and longer term threat to food supply. "Fires and droughts are damaging crops such as wheat, corn and soybean in the US and coffee crops in Brazil," he said. "We can't ignore it."
Pandemic changed our eating habits
More and more of us have taken to cooking and eating at home through the pandemic that's contributing to the grocery supply crunch, too, said Lempert.
"We don't want to keep eating the same thing and are trying to vary home cooking. As we do that, we're buying even more food products," he said. The shortages have also made buying foodincreasingly more expensive
going into 2022.
Grocery stores certainly are aware of the empty shelves, Lempert said, and they are trying to mitigate panic buying, which only worsens it the situation.
One strategy: Fanning out products. They're doing this by putting out both limited varieties and limited quantities of each product in an attempt to prevent hoarding and stretch out their supplies between deliveries.
"Pre-pandemic you might have seen five different varieties of milk across the front row and 10 cartons deep. Now it will be five across and maybe two rows deep," said Lempert.
-- CNN's Nathaniel Meyersohn and Danielle Wiener-Bronner contributed to this story
For The Giant Company, our cost inflation has accelerated during the past five months and is around 4% — more than triple the 2020 rate of 1.2%. Hopefully the inflation rate has peaked, but there does not appear to be any real deflation on the horizon. Most of the factors driving price increases are beyond our control — like ongoing labor shortages, limited availability of raw ingredients, freight and packaging constraints, and unpredictable weather events. The more it costs to make an item and get it to its final destination, the higher the price goes.
Consumers are increasingly becoming worried. According to The Food Industry Association's latest U.S. Grocery Shopper Trends Tracker, more than half of consumers surveyed (53%) are concerned about rising prices
. Our own research, conducted regularly via research groups and virtual panels, echoes their findings. Customers are monitoring prices, substituting what they put in their carts and even going without.
There is good news, though. The grocery industry, including our team, is adapting to consumer needs in real-time, and will continue to do so despite these market conditions.
At Giant, we are trying to absorb as much of these higher costs as we can to avoid passing them on to customers and protect them from more frustration. We're sending product from warehouses to stores earlier than it is needed, and also sending it in larger quantities to reduce the number of truck trips, which saves us on labor and transportation costs. For an industry that has historically operated on razor-thin profit margins, the current situation only exacerbates these pressures.
We're also aggressively investing in promotions to remain competitive and offer additional ways for consumers to save money. For example, this year we rolled out the Flashfood app to all of our Giant and Martin's stores, which allows shoppers to purchase fresh food, including produce, meat, deli and bakery products, nearing its best-before date at significantly reduced prices. Many of our customers have told us they can eat more fresh food because of the program.
Like us, grocers around the country are also aiding customers by suggesting how to plan meals and maximize their budgets, and by recommending different meals, recipes and ingredients that they might be able to substitute.
We're equally as invested in minimizing the impact of supply chain disruptions and shortages. We remain in close contact with our suppliers and are working to bring in alternate products, from both new and local suppliers. Buying local means we can mitigate shipping costs and keep retail prices down. Throughout the pandemic, we tapped on our long-standing relationships with Pennsylvania dairy farmers for milk and growers for potatoes and apples, which we never ran out of or raised prices on. In addition, our produce team brought on more than 20 new suppliers and grew strong, personal relationships with each, which also helped us meet the incredible demand experienced last year.
As quickly as we are getting deliveries to our stores and e-commerce fulfillment facilities, our hard-working team members are getting the products onto the shelves. We're encouraging our customers to be flexible and to purchase only what they need. It is possible customers may find a particular brand or variety is unavailable at a point in time, and in these instances our team members are ready to offer our customers comparable alternatives.
As someone whose career started in retail at the age of 16, I can assure you the challenges we're facing are personal for us, too. Our company isn't taking this laying down; we're determined to make it to the other side. I have never believed more in the grocery industry and in our nation's food manufacturers and growers. I'm inspired by the leadership that continues to be demonstrated by our industry to serve families and communities.
If we've learned anything over the past nearly two years, it's how resilient each of us can be. It's this spirit that makes me so proud and thankful to be a part of our industry. With Thanksgiving right around the corner, we want this to be the best one yet for customers, team members and their families. Now more than ever, we all need to spend that valuable time together, connecting over a meal and making memories.