Empty grocery shelves return as sick employees, supply chain delays
Bread aisle shelves at a Target are seen nearly empty as the U.S. continues to experience supply chain disruptions in Washington, U.S., January 9, 2022.
Sarah Silbiger | Reuters
Empty shelves have returned at supermarkets as grocery employees call out sick and truckloads of food arrive late.
That’s one of the latest outcomes of the omicron variant, which is straining the workforce. Investors are seeing the pressure and bracing for a longer period of high costs for labor, transportation and food.
Shares of major grocers including Albertsons, Kroger and Walmart fell Tuesday. Albertsons shares fell 9.75% to $28.79 at market close, after the company detailed the supply chain challenges and inflated costs it’s seeing on its earnings call. The dive in its stock occurred even though the grocer raised its fiscal 2021 forecast. Shares of Kroger fell about 3%, while Walmart shed less than 1%.
Covid cases and hospitalizations have hit records in the U.S., as the highly contagious variant spreads. The country reported about 1.5 million new cases on Monday, according to data compiled by Johns Hopkins University. Hospitalizations have surpassed last winter’s peak, with 144,441 Americans hospitalized with the virus as of Sunday, according to data tracked by the Department of Health and Human Services.
Workers feel the strain
Grocery store workers are feeling the effects of omicron, too. Samantha Webster helps replenish coolers with butter, gallons of milk and more as dairy manager of a Safeway store in the San Francisco Bay Area. Safeway is owned by Albertsons.
Since early December, she said more and more employees have had to take off from work because of getting Covid or having close contact with someone who is sick. She said 15 employees are currently out of the store’s nearly 60-person staff.
Fewer pallets are arriving from Safeway’s warehouses and there are not enough grocery workers to help unload them, she said.
In the dairy department, there are gaping holes where there used to be cream cheese and yogurts. Fresh bagels and loaves of bread are missing in the bakery aisle. And in the produce department, potatoes are running low.
In other aisles, she said there are signs of strain, too, such as a shelf filled with cans of clam chowder soup because other varieties, like minestrone and pea soup, did not arrive.
“The shelves are becoming more and more bare,” she said. “One person can’t keep an entire department going.”
CEO says Covid prolonging out-of-stocks
Albertsons CEO Vivek Sankaran said on the call that the grocer has had low inventory or missing items in some categories for several months. He said the latest spike in Covid cases is prolonging some of those out-of-stocks.
“We were expecting that supply issues to get more resolved as we go into this period right now,” he said on the call. “Omicron has put a bit of a dent on that. So there are more supply challenges and we would expect more supply challenges over the next four weeks to six weeks.”
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