Are out-of-stocks making c-store visits less convenient?
Grocery stores are not the only food retailers experiencing significant stock-outs this year.
Customers are more frequently finding shelves empty of the food they are looking for at convenience stores, according to a CNN article. One Texas-based convenience store chain, TXB, reports experiencing out-of-stocks at a rate of 12 percent to 13 percent, with 6,500 to 8,000 products per week failing to show up from suppliers. The normal rate is about 1.5 percent. In this environment, even substitute brands for out-of-stock products are proving hard to come by.
The phenomenon is particularly concerning in lower income communities where convenience stores serve as the only place to buy groceries. At one location of convenience store Arko, which operates mostly in small towns and rural areas, customers have been lining up early in the morning to try to catch the delivery trucks and get products as soon as they are stocked.
Mass out-of-stocks have been a problem in grocery throughout the pandemic. In the earliest days, panic buying frequently cleared shelves of toilet paper, paper towels, pasta and other staples. Then workers taking ill at U.S. meatpacking plants led to disruptions in meat and poultry selections on the shelf. More recently, closed overseas ports due to workers sick with COVID-19 and a scarcity of truck drivers to move product stateside have contributed to the unreliable assortment on retailer shelves.
Supply chain disruptions have also been pointed to as a factor in food price inflation, which rose in January of 2022 at the highest rate in a decade, according to Seeking Alpha. Raw material costs have also risen at an accelerating rate throughout the pandemic.
Retailers outside of food have likewise faced problems with out-of-stocks due to supply chain disruptions. In the ramp up to the holidays, apparel retailer Gap went as far as to reroute 35 percent of its holiday product through air freight, to the tune of $450 million, to try to outmaneuver port bottlenecks and get product on the shelf.
- Even your backup grocery store is struggling to stay fully stocked – CNN
- Global Food Price Inflation Reaches All-Time High Amid Record Supply Shortages – Seeking Alpha
- How bad will product shortages get this time? – RetailWire
- Is air freight worth the cost to Gap? – RetailWire
DISCUSSION QUESTIONS: Are convenience stores positioned to weather stock-outs better or worse than grocers? What should they do to better manage this situation?