Extract from ABC News
Posted
For many people the beginning of the coronavirus crisis was marked with scrambles to buy toilet paper and supermarket scrums.
Now most of us seem to have settled down. But how come we are still seeing some empty shelves in the supermarket?
The ripple effect of panic buying
Everyone is still playing catch up.Coles chief operations officer Matt Swindells said the panic buying phenomenon started a ripple effect that impacted every aspect of the supply chain.
To get everything back to normal, "all of that has to be unpicked", Mr Swindells said.
And that could take weeks.
Normally, when a product is cleaned off the shelf, supermarket staff might have been able "go out back" to grab more of that item from recent deliveries.
If there's none there, they'd have to wait for a delivery to be trucked from a distribution centre or direct from a producer.
And if there's no stock at the warehouse, they'd have to wait on the manufacturer to make more of the product.
But the manufacturer might be waiting on ingredients that it needs to make the product.
And those ingredients have their own growing and production times.
Each of these steps take time.
Mr Swindells said to think of a supply chain as a loop — the growers or manufacturers have to know how much of their product they need to make and that's influenced by what shoppers are buying.
Usually, manufacturers have a pretty good idea about how much stuff needs to be made.
But panic buying threw all that out the window.
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We're not going to run out of food
"In Australia, we are lucky because most of the food we consume is produced here," Australian Food and Grocery Council's acting chief executive Geoffrey Annison said."Annually, Australia produces enough food to feed 75 million people — three times the population."This has kept any shortages to a minimum during this period."
The same goes for toilet paper.
A Woolworths spokesman said most of the loo paper we use is produced in Australia.
The shortages we saw were not because something destroyed our toilet paper factories and wiped out our supply but because there were more people buying more of it than usual.
"The amount of toilet paper Australians need is not the same amount of toilet paper Australians are trying to buy," Mr Swindells said.
And we're still cookin'
"As an essential service, Australia's food and manufacturing sector continues to operate, obviously with extra safety precautions in place," Dr Annison said."In some rare cases, production may rely on an imported input and, if this is delayed, this could impact production."
So, if a product needs an ingredient that comes from overseas, it might take longer to make.
But Dr Annison said this hasn't been an issue yet and the council was working with the Federal Government to "ensure the supply chain continues to flow".
In a statement on the Woolworths website, chief executive Brad Banducci said toilet paper supply was up by more 70 per cent than last year.
He said Woolworths had secured an extra 500,000 packets of pasta and an extra 850,000 units of pasta sauce.
So there's definitely still a lot to go around.
Weather still impacts supply
Mr Banducci said there had been fluctuations in prices for some products."In fresh food, some of these are normal seasonal variations and some, like cauliflower and broccoli, are still seeing the longer term impacts of drought and unseasonal growing conditions.
"Truss tomatoes, on the other hand, are starting to come down in price after improved weather in growing areas over the last two weeks.
"We are incredibly sensitive to the financial pressures and uncertainty in Australia right now."
Can we speed up the process?
For some products, sure.Using toilet paper as an example, Mr Swindells said there was "re-engineering of the manufacturing process" during the surge in demand.
Where some factories were making multiple products, they cut back on some items to pump out more of high-demand stuff like toilet paper.
Transportation was sped up by bypassing distribution centres and going straight to shops.
And instead of individually stacking the packets on shelves, Mr Swindells said toilet paper was wheeled into the store on the packing pellet it arrived on.
"Every part was optimised," he said.
Photo:
Toilet paper was highly sought after at the height of panic buying. (ABC News: James Carmody)
Your questions on coronavirus answered:
But it's harder for something like eggs, because you can't exactly tell a chicken to lay more eggs.
"Mother nature doesn't listen," Mr Swindells said.
Another thing that helped speed things up was the lifting of noise-related curfews that restricted truck access to loading docks to certain times of the day.
This meant shops were able to take deliveries around the clock.
Did restrictions help?
Supermarkets put in a host of restrictions to stop people buying up entire supplies of a product.This didn't stop the products being sold quickly but it meant they were distributed more evenly.
Mr Swindells said it created a bit of a "doom loop".
"Because you see supply on one product is low so you stock up on other things," he said.
So one shortage might lead to another three products being bought unnecessarily, which might prompt people to buy 10 more items and then suddenly there's shortages across the whole store.
What the experts are saying about coronavirus:
Are people still panic-buying?
For the most part, shoppers are starting to relax."The panic has gone," Mr Swindells said.
"But demand hasn't settled down yet — it is still inflated."
A spokesperson for Woolworths said things were calming.
It's reached a point where the grocery chain has begun lifting the restrictions limiting the number of particular items customers can buy.
Woolworths lifted restrictions on things like canned vegetables and long-life milk.
However, the two-pack limit was still in place for things like pasta, flour and hand sanitiser.
This week Aldi supermarkets returned to normal trading hours after temporarily cutting opening times.
So, when will things get back to normal?
The products are steadily returning to the shelves, but how quickly shelves are fully stocked again is reliant on customers.Across all chains, the message for customers is to grab what they need as they need it.
Just buy what you would normally buy, Mr Swindells said.
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