COVID-Inspired Food Shortages

October 2020

Changing consumer preferences have made it harder to obtain some food items.

Initial shortages of toilet paper have disappeared as supplies rebalanced with demand.

More people are cooking at home and in need of flour, baking ingredients and paper towels which, despite boosting production by up to 40 percent, flour mills and food manufacturers remain unable to service.  Some have been able to repackage items normally provided in larger quantities to restaurants, schools and hotels.

Typically, a supermarket can be out of stock for five to seven percent of items much of which are seasonal.  In March, 13 percent of items were out of stock.  As of August, out of stock items had been reduced to about 10 percent.  Purchase limits may be periodically imposed on food and paper items in heavy demand.

Companies currently working to reduce product shortages may be unable to do so as reopening plans are delayed and demand increases for fear of a “second wave”.

Overall price increases have averaged five percent or higher rather than the more typical two percent.  Increases in supplier costs in excess of six percent have yet to be reflected in retail pricing.

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