Shopping for Thanksgiving turkeys has begun—for supermarkets

Check out what’s clicking on FoxBusiness.com. For U.S. consumers, Thanksgiving is still two months away.

For U.S. consumers, Thanksgiving is still two months away. At grocery chain Tops Markets LLC, Jeff Culhane was shopping for turkeys last winter.

Tops and other U.S. supermarket operators started purchasing turkeys, spices and cranberry sauce early this year, aiming to avoid shortages that left some store shelves empty in 2020. Grocery chains are struggling with supply-chain challenges ahead of what is typically their busiest time of the year, and some executives said they are preparing for consumers to host larger gatherings than they did late last year—though it is becoming less clear how people will spend holidays as the delta variant drives COVID-19 cases higher.

“We locked down turkeys in the second, third week of February,” said Mr. Culhane, senior vice president of merchandising for Tops.

Trying to deter national shortages like in 2020, supermarkets have begun stocking up on Thanksgiving turkeys. (iStock / iStock)

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Supermarket executives said they have secured many holiday staples after ordering more products such as stuffing and gravy from a wider range of brands than usual, and many are trying to receive items faster so they can have them stationed in their warehouses. They say they are buying goods earlier to ensure they get as many products as possible from suppliers ahead of the holidays.

Still, grocery industry officials warned that consumers may not find every brand, flavor or size of food they want for Thanksgiving and Christmas meals. Consumers may also see higher holiday shopping bills as retailers pass down cost increases in transportation, labor and commodities, they said.

Broader supply-chain challenges persist for retailers due to shortages of labor and raw materials. A range of products, including bottled beverages and snacks is running short, as logistical challenges compound for the food industry. Companies are short of truck drivers and plant workers while goods continue to get held up moving through ports. Supermarkets are sometimes receiving as little as 40% of what they order compared with pre-pandemic days when they got well over 90%, executives have said.

New York-based Tops said it began preparing for this year’s holiday season as soon as last year’s wrapped up, placing advance orders for items that had proved difficult to keep in stock. The company purchased holiday staples such as gravy, cranberry sauce and nutmeg and cinnamon spices, in addition to red and green sprinkles for treats. It has been housing frozen turkey and other items in its warehouses since earlier this summer.

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Some chains say their canned pumpkin products have been delayed and are planning to sell more store-brand versions if needed.

Grocery delivery provider Fresh Direct LLC began ordering turkey in February, about a month earlier than it typically does, said Scott Crawford, its chief merchandising officer, adding that the company ordered 2% to 3% more to make sure that it will have enough. Fresh Direct, owned by Koninklijke Ahold Delhaize NV, is also having other holiday items arrive earlier, including sugar, flour and other ingredients for prepared food it sells.

“It’s a bad reason to lose a customer because you don’t have cranberries,” Mr. Crawford said.

Retailers said that they have enough warehouse space to hold holiday goods, but that it is expensive to prepare earlier, partly because the products’ prices can drop later in the year. Many chains are paying extra to secure more trucks.

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SpartanNash Co. is spending more on wages and transportation to lock in labor necessary to keep its inventory of goods flowing, said Dave Petko, its chief supply-chain officer. The Midwest food retailer and distributor, which began planning for this year’s holiday season 53 weeks out, is evaluating how much inventory it will need based on COVID-19 case levels.

Some said they would rather spend more than risk empty shelves.

“We wanted to make sure we didn’t get left out,” said Steve Smith, chief executive of Food City stores in the southern U.S. Food City received and started selling Halloween candies in August compared with the typical starting point of October, he said.

Food sellers forecast and adjust demand based on sales volume. Some said they worry that they may have underestimated consumer demand: Grocery sales have been stronger this year than many retailers expected, even as pandemic-related restrictions on restaurant dining receded.

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Some items, such as canned tomato products, have already been running low in recent weeks, executives said. They added that they still don’t know how full or on-time their deliveries will be from manufacturers, and that there isn’t much to do when they receive only a portion of what they purchased.

“We are taking more because we do know there’s going to be shortages,” partly because of demand, said Gus Lebiak, president of distributor Krasdale Foods Inc.

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Consumers themselves may shop for holiday gatherings earlier, some executives said, to avoid the last-minute stress of finding staples. In stores, industry officials said, shoppers won’t find empty shelves, but may find less variety of items.

“It may not be the label they’ve used for the last 20 years,” Tops’ Mr. Culhane said.

https://www.foxbusiness.com/markets/shopping-for-thanksgiving-turkeys-has-begun-for-supermarkets