COVID-19

Changes in demand and disrupted supply chains feed into shortages at the store

Andy Uhler Apr 13, 2020
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Empty shelves have become a common sight at grocery stores across the U.S. during the COVID-19 pandemic. Amy Sussman/Getty Images
COVID-19

Changes in demand and disrupted supply chains feed into shortages at the store

Andy Uhler Apr 13, 2020
Empty shelves have become a common sight at grocery stores across the U.S. during the COVID-19 pandemic. Amy Sussman/Getty Images
HTML EMBED:
COPY

If you’ve been to the grocery store lately (and we remind you that you should only go if you have to), you might have seen some empty aisles. Rice, pasta, flour and toilet paper have been tough to find for some.

Before COVID-19, when we went to the supermarket we were used to seeing shelves jam-packed.

Jim Luke, an economics professor at Lansing Community College, called it an “inventory illusion.” 

“The reality is that stuff is flying off the shelf. It’s an extremely efficient, tightly controlled or run supply chain,” he said.

When we’re talking about toilet paper, the problem is that so many of us have been told to stay home.

“What’s called the retail product, which is what we use in our home, is a very different product than what is typically used in what’s called the away from home market. Businesses, corporations, factories, hospitals,” Luke said.

Commercial toilet paper often comes in bigger rolls that wouldn’t easily fit in a home bathroom. It starts with a different kind of wood pulp, is packaged differently and it’s delivered through a separate transportation network.

Which means companies can’t just turn on a dime and start producing more retail product.

“All you need is, in a supply chain like this one, short-term shock that happens for two or three days and it takes a long time for the supply chain to work its way back to a stage where everything is back to normal,” said Sunil Chopra, professor of operations management at Northwestern University.

These supply chain complications aren’t just affecting the toilet paper aisle in your grocery store, though.

Shelie Miller, director of the environment and sustainability program at the University of Michigan, said food companies have to adjust to the new reality, too. They’re selling a whole lot less product to restaurants these days.

“Under normal circumstances, we spend about half of our food dollars eating outside of the home. Over the past few weeks, we’ve transitioned drastically to consuming most of our food inside the house. And that’s actually put a lot of strain on supply chains,” Miller said.

Meat suppliers, for instance, sell in bulk to restaurants but to single families in grocery stores. 

“So unless there’s a way to change the wholesale supply chain, there’s just going to be a mismatch there until the supply chain is able to keep up and catch up with the changing demands,” she said.

Miller said it’s getting a little easier to get your hands on foods that were in short supply just a few weeks ago, though, because manufacturers have shifted things around. 

As for toilet paper, it’s hard to know when supplies will normalize, but consulting firm NCSolutions said demand has softened since the middle of last month, which could make it easier to pick up a couple of rolls next time you’re at the store.

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy continues reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

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