Shortages generally lead to higher prices.
By guest author James Freemann from the Wall Street Journal
Last week your humble correspondent found several empty shelves at each of two Indiana department stores. This week the proprietor of a Massachusetts diner reports that he can’t find needed kitchen staff. The restaurateur adds that he has personally enjoyed 1.5 days off work since the spring of 2020. Anecdotes aside, many businesses continue to run short of supplies and labor, suggesting prices for both will continue to rise.
Jaewon Kang reports for The Wall Street Journal:
Grocery-store chains are still battling supply challenges that some executives said are as bad as what they saw in spring 2020, when hoarding left holes in stocks of some staples.
Industry executives say new problems are arising weekly… Groceries including frozen waffles and beverages remain scarce as some food companies anticipate disruptions lasting into 2022. A wider range of products is running short and logistical challenges are compounding for many retailers.
Donny Rouse, chief executive of Louisiana-based Rouses Markets, said he is struggling to fill shelves as his company runs low on everything from pet food to canned goods. The chain of more than 60 supermarkets is sometimes receiving as little as 40% of what it orders, prompting Mr. Rouse and his staff to try to secure products earlier and more often. Before the pandemic, Rouses received well over 90% of its orders.
Ms. Kang reports the good news for customers of Stop & Shop Supermarket LLC that the firm is “lowering prices of substitutes for items that are running low.” But scarcity will certainly force many firms to eat higher costs or pass them on to customers. Ms. Kang adds:
Amber Edwards, a mother of two who lives in Huntsville, Ala., said she has driven this summer to multiple supermarkets in her area for large packs of cherry Gatorade but has only found small sizes of other flavors.
“The shelves are empty, and online they are always out of stock,” Ms. Edwards said, adding that she has been buying whatever she can find.