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Supply Lines: Stocking up again

Supply Lines
Bloomberg

Covid-19 cases are spiking again in the U.S., and so is consumer stockpiling.

There's an important difference from the first round back in March, however: This time the makers of packaged food and household items have had time to prepare. Even so, toilet paper and sanitary wipes are once again getting scarce, and there's always the risk that bare shelves could spark even more panic purchases.

In early November, demand for non-perishable items such as paper goods, canned goods, spices, broths and canned vegetables jumped 60% to 70%, according to Centricity, a platform that tracks online activity like searches and e-commerce. That's on top of "meteoric" year-over-year increases for pantry staples, said Mike Brackett, Centricity's chief executive officer. Data from Adobe Analytics, which also tracks online orders, also shows a rise in purchases of items like paper products and first-aid kits.

JM Smucker, the maker of Jif peanut butter and Folgers Coffee, says it's ready to meet another wave of grocery demand amid a new spike of Covid-19 cases.

Around the Clock

In the case of Clorox, the bleach maker is shipping out its disinfecting wipes as fast as the company can make them, but it's still not fast enough. While the company planned to have inventories replenished at major retailers by this summer, unprecedented demand throughout the pandemic has persisted. To cope, Clorox has added 10 more third-party manufacturers and is running its own facilities 24 hours a day.

The new wave of pantry loading has forced big-box retailers like Target and Walmart to implement policies to limit the amount of wipes customers can buy per visit. To further curb stockpiling, they've halted online sales of the products, instead directing shoppers to purchase them in stores.

Kraft Heinz CEO Miguel Patricio said in an interview last month that the company has been finding new partners and investing in the productivity and capacity of its factories to meet rising demand. General Mills added 45 external production lines through contractors this year, while Campbell Soup spent $40 million to expand production of Goldfish crackers, a must for parents cooped up with toddlers.

As purchase limits materialize once again, consumers should shop earlier in the day to "have best pick from freshly stocked shelves, but to be mindful of their neighbors and take only what they need," said Jim Dudlicek, a spokesman for the National Grocers Association.

Jonathan Roeder in Chicago

Charted Territory

Most Americans are melding their Thanksgiving-period shopping plans this year with the goal of avoiding crowds, according to a survey by Deloitte. Nowhere is that more evident than on Black Friday, the day traditionally known for its doorbuster deals. For the first time ever, more consumers intend to shop online than in stores, a switch driven by the coronavirus pandemic.

Today's Must Reads

  • Amazon issues | Unions representing tens of thousands of Amazon employees are planning walkouts and other action as the year's busiest shopping season begins this week. Meanwhile, Amazon's move to dole out hiring bonuses as high as $3,000 to make sure it has enough people to squeak through the busy holiday shopping season is stoking resentment among existing workers. Additionally, Amazon founder Jeff Bezos is being targeted by shipping groups to support some 400,000 seafarers stuck on merchant vessels.
  • Delayed shopping | Amazon and other major retailers in France agreed to postpone Black Friday amid an outcry from smaller rivals, which have been campaigning to re-open physical stores before the promotional event.
  • Aux Champs Elysées | Covid-19, protests and falling sales have crushed luxury-shopping districts around the world. Can they bounce back and have a happy holiday?
  • Go local | Ontario Premier Doug Ford pleaded with consumers to "shop local" amid tightened Covid-19 restrictions across parts of Canada's largest province. Ontario is also restricting fees that companies such as Uber and DoorDash charge restaurants for delivery as coronavirus cases continue to rise.
  • Streaming Santa | The bane of Europe's traditional retail stores over the past decade — the internet — is now the thing they're clinging to for survival.
  • Staying open | U.S. retailers are so far winning the battle to keep open stores that don't sell "essential goods" as a resurgent coronavirus brings new restrictions, a contrast from the early days of the pandemic that caused so much economic pain.
  • Funky chicken | It was a turkey-free Thanksgiving for some Whole Foods customers in seven U.S. states. Unhappy customers took to Twitter to complain their fresh turkeys smelled bad.

On the Bloomberg Terminal

  • Slowing down | After a temporary period of stability in European economies earlier this month, activity slowed again in Germany, Italy, Spain and France. Activity in the U.S. and Canada continued to move sideways in the last week of November.
  • All aboard | North American rail traffic rose 5.2% last week, fueled by a 12% jump in intermodal volume growth, though the strength was partly magnified by a comparison to figures from Canadian National's eight-day strike from 2019.
  • Use the AHOY function to track global commodities trade flows.
  • Click HERE for automated stories about supply chains.
  • See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.
  • Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts.

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