Some restaurant chains deal with supply shortages by trying to pivot
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At least nine fast-food chains and restaurants surveyed by Reuters acknowledge some of their locations are dealing with shortages of key ingredients and menu items, as companies deal with end-of-lockdown distortions in supply chains. That means they need to figure out some way to deal with it to ensure customers will come back.
Just in time for the Fourth of July, we’ve got a shortage of hot dogs and chicken wings.
“The world’s supply chain is in a mess right now,” said John Gordon, principal at Pacific Management Consulting Group. He said the larger chains do have the benefit of telling distributors to prioritize the delivery of staple goods.
“So, if you have a million cases of X, then that commands respect, not only in terms of price, but in terms of getting the product if market conditions get really bad,” Gordon said.
Because those conditions are really bad right now, some chains are trying to pivot. The chain Wingstop just launched a brand focused on another part of the bird, calling itself “Thighstop.”
But that’s a hard shift, said Sunil Chopra at Northwestern University. “I think the real challenges are the fast and the fast casual. It’s much more difficult for them to react when they have a supply chain disruption,” as opposed to fine dining restaurants, which offer different menus all the time at a premium price.
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