Saturday, December 10, 2022

"Trader Joe's Stores Are Out Of Thousands Of Grocery Items As Shortages Intensify"

Full screen recommended.
"Trader Joe's Stores Are Out Of Thousands 
Of Grocery Items As Shortages Intensify"
by Epic Economist

"At this point, we have all gotten used to seeing empty shelves when grocery shopping. But when you’re talking about a store that is about one-fourth of the size of the typical Walmart, and whose product line is nearly 20 times smaller than big-box retailers’, when an item we love is out of stock, we notice it immediately. And that’s the case with Trader Joe’s. The company is very secretive about its suppliers and often discontinues products without any notice, something that Trader Joe's loyalists have been noticing that’s happening far more frequently in recent months. Every day, there’s a flood of social media posts published by disappointed customers complaining about stockouts and inventory holes at their local Trader Joe’s. And even though the grocery retailer has previously said that it keeps its product catalog lean to always ensure lower prices, it turns out that the truth behind the bare shelves we’re now seeing at this beloved chain is far more complex than that.

As opposed to other big retailers, Trader Joe’s doesn’t overorder items in anticipation of higher consumer demand or potential stockouts, and that sometimes leaves its stores with too few products available for shoppers. Even though its store layout makes us feel like we’re buying at a local market, and its brand-name items seem to be more sustainable compared to those of other grocery chains, Trader Joe’s is actually a multi-billion-dollar privately-held corporation and leaked documents show that the chain gets its products from the same food makers as other big-box retailers do. Actually, some consumer favorites including its Dry and Roasted Salted Pistachios and its Smooth and Creamy Classic Hummus are produced by no one less than Pepsico and Frito-Lay.

This small grocery chain is silently suffering from the same issues as bigger players, and customers are now seeing with their own eyes that the impact can be harder. The rate of out-of-stocks at Trader Joe’s is actually almost 40% higher than the rate of bigger competitors like Whole Foods, according to estimates released by Investopedia. Although the company says it’s all about offering the best quality product at the lowest price when the whole industry is facing supply and demand issues, that’s a promise they may not be able to keep.

Many of the store’s superfans lament the growing habit of panic buying that helps to keep shelves bare and worsen shortages in the long-run. Others say that if you’re not hoarding at Trader Joe’s, you’re not doing it right. With online shoppers documenting everything they see, a new rush of grocery hoarding at the retailer’s locations isn’t improbable. In fact, when people start realizing that inventory holes are only growing larger, they’re likely to take the chance to stock up on food staples before prices jump even higher and products become impossible to find.

In an environment where food manufacturers are dealing with higher costs of energy, raw materials, and commodities and a sizable reduction in the global food supply, it’s getting virtually impossible for them not to pass along those costs for retailers to offset their own losses. And that’s a hazard for Trader Joe’s business model.. On top of all that, Trader Joe’s might also be left at the end of the list of big food suppliers when shortages really start to sting in the coming months, and other retail titans, which are better positioned financially, are likely to snatch the available supply and raise prices accordingly. All the evidence we have found points to even more product stockouts, discontinuances, and persistent shortages for this adored retailer. Its supply chain may be leaner and more practical than other major grocers, but the problems it faces are just as big."

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