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Grocery Stores Change Strategy to Keep Items In Stock

By: Noah Shulman

https://www.wsj.com/articles/grocers-stockpile-build-pandemic-pallets-ahead-of-winter-11601199000

Grocers Stockpile, Build ‘Pandemic Pallets’ Ahead of Winter

September 27th, 20202

To understand the current situation of grocery stores deciding to stockpile goods we have to go back to some background information about the situation. We all remember back in early March when we went to the grocery store and would find empty shelves row after row. This was because of people going out to the store to get essential items to prepare for a lockdown. Grocery suppliers could not keep up with demand because of a lack of labor coupled with people buying multiple week’s worths of groceries. 

Now, we have returned to mostly full shelves but businesses fear that this might not be the case for long. Many grocery stores are preparing for an increase of demand due to the second wave of the virus combined with the holiday season. Further, in the situation in March, grocery stores relied on suppliers abroad and domestic to deliver the product right before they were needed on the shelf. In other words, grocery stores did not have large amounts of each product stored. Now, grocery stores are holding 10-15% more of products in inventory to prevent from running out of products again. 

While some would think using a global supply chain would help increase productivity and supply. In this situation, using global markets did not help the US market, as the coronavirus also affected the suppliers and supply chains from other countries. This situation also shows how reliant and important the globalized market is. While there are many positives of using a global market and supply chain, in this situation we can see how it did not make it easier to get some grocery items. 

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