Obituary

Grocery stores empty shelves, Empty grocery shelves return as sick employees

Shelves in supermarkets are empty again as grocery workers call in sick and a truckload of food arrives late. This is one of the latest developments in the omicron variant, which is putting pressure on the workforce. Investors see pressure from high costs for labor, transportation and food and are bracing for higher costs for a longer period.

Shares of major grocers including Albertsons, Kroger and Walmart fell on Tuesday. Shares of Albertsons fell 9.75% to $28.79 at the close after the company detailed supply chain challenges and inflated costs on an earnings call. Even though the grocer raised its forecast for fiscal 2021, its shares took a nosedive. Kroger shares fell about 3%, while Walmart shares fell less than 1%.

Covid cases and hospitalizations are hitting records in the U.S. as the highly contagious variant spreads. The country reported about 1.5 million new cases on Monday, according to data compiled by Johns Hopkins University.

As of Sunday, hospitalizations had surpassed last winter’s peak, with 144,441 Americans hospitalized with the virus, according to data tracked by the U.S. Department of Health and Human Services.

Grocery store workers are also feeling the effects of omicron. Samantha Webster helps refill coolers with butter, gallons of milk, and more as dairy manager for Safeway stores in the San Francisco Bay Area. Safeway is owned by Albertsons.

She said an increasing number of employees have had to leave work since early December because of the virus or close contact with people who are sick. The store currently has 15 of its nearly 60 employees, she said.

She said fewer pallets were coming in from Safeway warehouses, and there weren’t enough grocery workers to help unload them.

In the dairy department, there are big holes where there used to be cream cheese and yogurt. No fresh bagels and bread in the bakery aisle. And in the production sector, potatoes have run out.

In other aisles, she said, there were signs of nervousness, such as a shelf full of canned clam chowder, as other varieties, such as minestrone and pea soup, did not arrive.

Grocery stores empty shelves, Empty grocery shelves return as sick employees

“Shelves are getting more and more empty,” she said. “One person cannot keep an entire department going.” Albertsons Chief Executive Vivek Sankaran said on a conference call that the grocery store has been experiencing low inventory or missing items in certain categories for several months. The latest surge in Covid cases is prolonging some of these out of stock, he said.

“As we go into this period now, we expect more supply issues to be resolved,” he said on the conference call. “Omicron has weakened on this front. So there are more challenges in supply and we expect the next four to There will be more supply challenges in six weeks.”

The new coronavirus variant is exacerbating worker shortages in industries ranging from restaurants and retailers to airlines. Company leaders were forced to make difficult decisions, such as shortening service hours, canceling flights and closing stores. This is also starting to show up in sales figures. Lululemon is one of the retailers warning that fourth-quarter earnings and revenue will be at the low end of expectations as it feels the impact of reduced hours and limited staff.

For grocers, however, the challenge can be even greater because it’s a low-margin business and companies often don’t have much room to raise employee wages, pay overtime or pass on higher costs to customers. Some shoppers also have less money to spend. The Child Tax Credit, which provides families with monthly payments, ends in December.

On Tuesday, Albertsons leaders said the cost of ingredients, packaging, transport and labour had risen. The grocer has experienced some inflation but is trying to rein in the prices of essential items customers often buy, they said.