Grocery Stores Are Stockpiling Food and Cleaning Supplies Amid Rising Costs and Demand

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July 8, 2021

Stockpiling by grocery store chains is driving shortages of some staples, according to industry executives, and is challenging the US food supply chain which is already being squeezed by transportation costs, labor pressure and ingredient constraints.

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Via businessinsider.com:

Grocers are stockpiling items like frozen meat, cleaning supplies, and sugar.
The nation's largest grocery wholesaler purchased up to 20% more inventory, The Wall Street Journal reports.
The US food supply chain is already struggling with transportation and labor costs.

Grocery stores are stockpiling food and other items in anticipation of rising prices and demand.

Paul McLean, the chief merchandising officer of Stew Leonard's, told Insider that the supermarket chain is purchasing 50% more inventory than usual, and that they've "bought ahead whenever possible" to protect margins. He specifically mentioned buying more paper products and imported goods like pasta sauce, pasta, and olive oil.

"We're buying more ingredients for home cooks – including flour and spices," McLean said. "We are also buying ahead on cleaning products for the fall and back to school."

McLean added that they've seen an increase in sales of lobster, shrimp, prime meat, and organic produce, with frozen food sales increasing 20% over the past year.

Some grocery stores are running into issues getting everything they ordered from suppliers, The Wall Street Journal first reported on Tuesday. "It runs the risk of making a bad situation worse," Mark Griffin, president of B&R Stores Inc., told the Journal.

Stew Leonard's does not anticipate rising prices substantially any time soon. "We are holding our pricing for the most part," McLean said. "Since we buy direct, there's been no disruptions to our supply of fresh products like produce, meat, and fish."

Grocery stores' stockpiling puts additional stress on an already fragile US food supply chain, which is currently struggling with labor shortages and high shipping costs.

From lumber and chicken wings to Starbucks drinks, product shortages have continued as the US economy reopens. Shortages are just one result of surging shipping costs, as maritime trade continues to recover from the pandemic.

A leading economist told Bloomberg that people may be underestimating just how much the shipping crisis will raise prices of consumer goods, Grace Dean reported for Insider.

Some grocery stores are raising product prices to minimize losses, the Journal reported.

According to the US Bureau of Labor Statistics, the Consumer Price Index (CPI) for food in May has increased by 0.4% compared to April, meaning that on average, purchasing food has gotten slightly more expensive in recent months.

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