izzy wrote: ↑23 Mar 2020, 16:41
Raleigh wrote: ↑23 Mar 2020, 15:49
Got an old school mate who ended up as a department manager in one of the big retail chains and what he says is that the supply chain only works fast enough to keep up with predicted sales, no more and no less.
All the supermarkets run on the minimum number of staff and minimum backstock levels possible to keep up predicted sales, they spend a lot of time calculating exactly how bare-bones they can cut the staffing and supply levels to meet those targets because profit margins are slim.
Which means that if demand jumps 50% or 100% then shelves empty almost immediately because there is no spare capacity.
According to him the limits make no difference (can't buy 10x one brand pasta? People buy 3x one brand, 3x another, they end up buying the same number and clear the shelves anyway) and are just a PR move to show supermarkets are doing something to fight the shortages.
Even if those limits had been introduced right away the shelves would still be empty because none of those supermakets had the spare capacity to keep up with the unexpected and massive spike in demand.
oh interesting, still it's logistics isn't it. They just had to ramp deliveries up a bit more at the start, stop people piling up multiple trolleys with whole huge packs of everything, being filmed, and it'd never have kicked off. Panic buying is something that feeds on itself, so if you can stop it starting you can stop it starting. One empty shelf goes viral and kerboom!
And supermarkets have been saying they actually have plenty of everything available, they could've reacted much sooner, but obviously they loved the idea of massive sales, until now gradually the PR has gone the other way
There's no major shortage of stock, it's just sitting in depos without enough deliveries to the stores. And even when deliveries catch up to demand there aren't enough staff to put that stock out. Or they put the essentials out and the rest of the store is rapidly decimated, leading to empty shelves everywhere and encouraging panic.
Really the only thing supermarkets could have done to avoid these shortages is to have predicted the panic buying and dramatically increased both supply and staffing rates before the panic kicked off. Which of course carries the risk of losing a lot of money if the timing isn't exactly right.
I don't think supermarkets will make much profit over the panic buying, anything gained in the initial sales rush will be lost when shelves are empty the next week, simply a case where being reactive carries less risk than trying to predict a potential shortage and panic buying.
And as said the limits are mostly a PR move without real effect (even if they had been started right away), they don't change the overall amount customers buy if determined to stock up on essentials.