Grocery stores across the US are now suffering with depleted inventories and empty shelves as they experience the worst supply chain crisis in decades. But the mainstream media coverage of this issue isn't telling us the whole truth. They're trying to convince us that what we have been witnessing at the stores recently is just a 'temporary' disruption that can be easily fixed and that will soon be gone. However, that's not what industry experts have been saying. In recent weeks, many of them came forward to warn that shortages and supply chain bottlenecks are likely to intensify as the holiday shopping season approaches.
With that in mind, today, we decided to expose what is really behind the shortages at our local supermarkets. In a recent article, writer and economic analyst Michael Snyder published an e-mail he received from an industry insider who told his side of the story. The source, who runs a grocery store in Maine, highlights that things are going from bad to worse. In fact, he even stressed that he has never seen "anything close to what is happening now”. Some of the information he shared is truly alarming and we should all spare a moment to hear it. "Supply issues are real!," he says. "My supplier has limited us on orders for about a month now - limiting the physical number of cases we can order".
His supplier's biggest issue is the unprecedented worker shortage in their warehouse. They're extremely short in order pickers and truck drivers. But it's the same story everywhere. All suppliers are experiencing similar difficulties to find new employees. As a consequence, many everyday items, such as energy drinks, soft drinks, bottled water, juices, fresh produce, and cleaning products are in short supply, he revealed. The quality of the fruits and vegetables arriving at his store is declining. In contrast, his meat supply was still "fair" at the time he wrote the e-mail, but pricing was extremely high. "Shockingly high to me. The middle class is slowly being destroyed with these prices hikes," the insider wrote.
"It’s frustrating. I'm self-employed for 25 years and worked for Kroger for 25 years before that, so I'm in this business for 50-51 years and have never seen anything close to what is happening now. I come to work every day just holding my breath for what is next for our business and the 35 people I employ here in Maine," the source concludes. Even though this grocery store owner has tried to order smaller quantities, his suppliers are still unable to fulfill them.
The situation he's going through is the same one faced by millions of small business owners all around the country. But even big grocery chains are struggling with delivery delays, dwindling inventories, and a shortage of workers. At this moment, supply shortages are widespread, and this is the worst that they have been since the onset of the health crisis. Sadly, what industry specialists have been telling us is that this is going to become the “new normal”.
At the same time, the extraordinary rise in food prices is becoming a threat for low-income households, who are having to spend a larger share of their monthly budgets just to have enough to eat on their tables. Meat prices are skyrocketing, and they have been rising faster than most other grocery prices. Meat, poultry, fish, and eggs are currently up 5.9 percent compared to last year, and over 15 percent higher than 2019 prices. We are now being told to brace ourselves for more price spikes in the coming months. Sysco, one of the nation’s biggest food distributors, reported food inflation levels of 10.2 percent on its most recent quarterly report, all of those increases are being passed along to customers in turn.
On the other hand, as shortages become more extensive, retailers have started to reimplement limits. Last Thursday, Costco said it was reinstating "limits on purchases of toilet paper, paper towels, and bottled water". Although they don't call it “rationing”, that is essentially what it is. Joining a long list of retailers, Costco is sounding the alarm about climbing shipping prices and worsening supply chain issues.
All things considered, it's safe to say that neither inflation nor shortages are going to be "temporary". At the beginning of the year, many were expecting the economy to be booming at this point, but instead what we have is huge price hikes and very painful shortages that are likely to persist for another year or two. Our economic infrastructure is being shaken to the core as events have begun to slide out of control. Beware of the next events because it won't take too much for us to be facing a full-blown avalanche.
https://www.epiceconomist.com
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