Surviving the supply crisis

After the nightmare of Covid-19, you’d be forgiven for thinking things couldn’t possibly get worse. But little did we know that further disruption lay just around the corner in the form of the HGV driver shortage, which is wreaking havoc with the food supply chain.

“The shortage of HGV drivers has meant we had more supply problems than during coronavirus,” says Pratik Patel who owns Jay’s Budgens of Crofton Park in London. “Booker had to choose what to deliver and what not to and focus on core lines. It has been a bit of a challenge.”

Avtar ‘Sid’ Sidhu of St John’s Budgens in Kenilworth, Warwickshire, shares Pratik’s opinion that the HGV shortage is impacting food supplies more than covid. “The situation currently and what we’ve been going through for the past month is far more profound than what happened last year from a supply chain point of view,” he says. “It’s definitely a lot worse now than last year.”

He recognises that it is a wider issue. “It’s not just affecting my symbol, it’s the whole industry, and not just food retail, building too. It’s affected by Brexit, drivers and the pingdemic - they’re the tri-force affecting the whole industry.”

Harry Goraya, owner of Rosherville Post Office (Nisa Local) in Gravesend, Kent, concurs that retailers across the spectrum are being impacted. “In the WhatsApp groups I’m on we have Londis, Spar, Booker retailers - it’s across the board,” he says.

He feels that the issue could have been resolved if preventative measures had been taken. “It’s reasonably apparent to us that as soon as Brexit took effect you knew there would be shortages of some sort, but nothing was done to subsidise that, no plans were in place and you see the results,” he says. “Drivers delivering to our wholesalers are unable to get the goods. Then Nisa hasn’t got the drivers to deliver the goods to us. You’ve got two lorry loads of x product coming and you’re short until it comes in. That looks bad on my shelves.

“Fortunately no customers are buying excessively, but they are noticing when shelves are empty and we’ve missed three deliveries on the trot.”

Sid explains that shoppers have no comprehension of the battle retailers are facing. “Within the industry it’s a well-known fact, but it’s under the radar for the consumer and I don’t think they care - they expect to go shopping and find the goods they normally buy,” he says. “They aren’t looking at the bigger picture. People come in and we’re missing x, y and z. You’re fronting that problem, that blame. We take it very personally, that’s what stands us apart as independent retailers.”

He claims that he hasn’t been as severely hit by the shortages as others, but is still finding the situation challenging. “We’re not too bad,” he says. “But don’t get me wrong, we’ve had to react considerably to ensure our shelves our full.

“We’re getting 70/75% of our order some days,” he says. “Yesterday was good – we had 13 cages. We had four fresh & chilled, so high 90s availability. But we’ve had the odd day where we’ve had a complete failed delivery.

“Ambient for me is flexible - you can gap fill those products elsewhere. We had no bread delivery, but we can run to Booker. We normally have 20 trays of bread delivered and we run to Booker and clear them out!”

Harj Gill, owner of The Windmill Select & Save in Birmingham, has faced a similar dilemma. “It’s been hard with the supply issues. Warburtons have played us around a bit - we’ve called them to chase our delivery and when we’ve phoned them, they’ve told us it’s not coming,” he says. “That’s put a spanner in the works three or four mornings. The store is family run, so we’re flexible and we can give up our time and go to the nearby Booker and stock up.”

Chilled food shortages have presented the biggest problem for Sid. “We’ve definitely had issues on fresh and chilled - for me that’s the most important part of the business, it’s the backbone for us,” he says.

“On fresh and chilled you can’t go to any typical cash & carry and they don’t have the range. It’s very difficult for retailers who’ve gone on that journey unless they’ve found good local suppliers.”

Local lifelines

A strong network of suppliers is helping Sid fill the gaps. “Local suppliers played a huge role in the pandemic,” he says. “The wonderful thing is we’ve always had these suppliers on board. We’ve continued to use them.”

He claims that his loyalty to local suppliers is now working in his favour. “I know quite a few independent retailers who did what they’ve needed to do last year [in terms of sourcing from local suppliers] and then went back to buying products from where they always have been when the constraints were over,” he says. “Now they’re running back to local suppliers again, but the suppliers will be loyal to their customers.” Sid claims that he is given priority because he is an existing customer. “You’re buying from them anyway, but now you may be buying more.”

Unless absolutely necessary, Sid doesn’t go to the cash & carry. “I personally am not shopping around,” he says. “My time is too valuable to operate in that way. The way the business is set up, we do outsource goods and services, but the only people I ever use is people who can deliver to me. We have strong relationships with a range of different suppliers and they’re only a phone call away and the stock arrives the following day or a few days later. I’m not using any more time than I did before - why have these added operational complexities and costs and your time when you can outsource it to others and they’re there to look after you.”

Sunder Sandher of One Stop in Leamington Spa was a huge advocate of local suppliers last year when the pandemic hit. He agrees with Sid that these relationships can prove extremely useful to retailers when their main supply route isn’t able to deliver. “What I would say is to have a secondary independent supplier, especially for lines like milk and bread,” he advises. “There are independent suppliers for impulse products if there are issues with main deliveries.”

Pratik has also received support from smaller suppliers. He has built up a wide network of suppliers in order to provide specialist products, which differentiates his store from the competition. “Non-mainstream brands had a better supply than mainstream,” he says.

Cash & carry on

Harj has West Midlands suppliers for eggs, milk and bread, and is also a familiar face at the cash & carry which he goes to once or twice a week. “The retailers who have struggled are those who rely solely on symbol delivery and people that haven’t got a stockroom,” he says. “You can’t rely on one symbol, I know some people do, but we’ve always gone to the cash & carry.” Harj’s business model is based on buying in bulk, which has stood him in good stead for the current situation. “We have three storerooms,” he explains. “We’ve always been well into stocking up. Even if you go two or three weeks without [receiving] stock - we’d still have it.”

In contrast, Nisa retailer Harry Goraya’s operations are heavily reliant on symbol deliveries. “We’ve geared our business now to having over 95% delivered,” says the owner of Rosherville Post Office in Northfleet, Gravesend. “I don’t work on site. I run another post office in London, but I’m having to make time to go to the cash & carries. I used to have a big van, but now I only have a smaller van, so I have to make extra trips. There are knock on effects - petrol, time, environment, covid safety. Nobody is compensating anyone for it.

“I’ve had to go to C&C three times in one day because so many things were zeroed I had to find somewhere that had them. Fortunately, the cash & carries are slightly better off. I was in Bookers and Bestway - water was limited to a maximum of 10 cases per customer.”

He is currently relying on his industry experience and cash & carry contacts to help make ends meet. “The good thing is, the likes of me have been around for a while - I’m on first name terms with cash & carry managers,” he says. “I’ll ask if they can increase the cases for me. 80% of the people I’ve approached have been kind enough to help, but they can only go so far. What we need is some kind of resolution to the driver issue.”

Sadly, there is no resolution in sight. “This isn’t going away any time soon,” says Sid. “It’s about battening down the hatches. Until 2022 there’ll be ripples of this issue.”

In the meantime, he says convenience retailers need to make the best of a bad situation and do their utmost to find alternative sources of supply and show customers that their local store can be relied upon. “It’s about reassuring people and it’s about strengthening your position in the local community - people know we’ve got their back,” he says. “We’ve had so many people who normally go to the competition and then they can come in here and get hold of stuff - broccoli, cauliflower and lamb chops,” he says.

He claims that, if the situation is handled correctly, c-stores can potentially earn customer loyalty. “This is 100% an opportunity - our sales are organically still growing,” he says. “In the face of adversity, you’re still looking normal in-store. Customers aren’t seeing the behind the scenes. It gives them confidence to shop here on a more regular basis. It’s not happening over a day, it’s happening over the years. Rather than it being a problem and being reactive and taking it in a stressful way you need to manage the situation. It’s not about you, it’s about your customers.”