Aldi says it can weather the food shortage storm

Projected food shortages draw attention to Supply Chain efficacy.

The Pandemic has caused production shortages in every industry which has led to massive dislocations in the container market, shipping routes, ports, air cargo, trucking lines, railways and even warehouses. The result has created shortages of food, key manufacturing components, order backlogs, delivery delays and a spike in transportation costs and consumer prices. We are now learning how the supply chain affects every other element in the global market.

Aldi UK’s chief executive Giles Hurley is confident the supermarket chain can weather any storms in the supply chain The boss of supermarket chain Aldi UK has told the BBC he doesn’t envisage any disruption for customers this Christmas.

There have been dire warnings about food shortages and empty shelves due to a chronic shortage of heavy goods vehicle (HGV) lorry drivers.

This year, the battle for consumers’ Christmas spend won’t just be about who has the best products – it’s shaping up to be a contest over who can keep the shelves full.

“We actually employ more of our drivers directly than a majority of the market and on leading terms and conditions and finally a lot of what we source is British and that means our supply chains are a little shorter and easier to control.”

“During the lockdowns people tended to do all their shopping in one place which favoured the big four retailers,” he told the BBC.

“Shoppers are now more comfortable being out and about again and are happy to visit multiple stores to get what they need – that’s good news for Aldi and Lidl, which typically benefit from people making those combination shops.”

But food prices are also starting to pick up, as retailers face a host of rising costs, from boosting driver pay to increasing commodity prices, packaging and shipping costs.

In 2016, Aldi was ranked as Britain’s seventh largest supermarket chain with a market share of 4 percent.
The grocery store is known for their low prices and a smaller product list. They offer about 1,300 items which include organic food and gluten free products. They also offer a vast international food section featuring Mediterranean, Asian, and African grocery items.
“We’re dedicated to providing unbeatable value to UK shoppers every day; whether it’s exclusive brands or everyday essentials,” said Aldi representative Kirsty Adams.
Aldi is well-known for its low prices and no-frills store design. A large proportion of the goods it sells are private-label, which explains why its prices are so low. It also has strict limits on shop area and hours, encourages customers to rent their own carts, and focuses on efficiency in order to minimize labor expenses.

Supply Chain Challenges after 18 months of Covid

Supply chains have been internationalized and globally integrated, which has brought about a need for global e-procurement. In the last decades, the industry has been pushing for shorter product life cycles and trying to catch up with rapidly changing customer demands. This makes it necessary that companies react quickly and dynamically to changes in demand. Improved online business-to-business (B2B) and business-to-consumer (B2C) integration, supported by improved communication networks, is becoming increasingly important when doing international trade.

The World Trade Organization estimates that it costs less to ship a container from Shanghai to San Francisco than from Los Angeles to Seattle due to reduced demand and an oversupply of transportation capacity. Get to know your supply chain and be prepared to find alternatives.

But the pandemic shutdown has changed all of that and created new issues for CEO’s and governance boards. Especially when you consider that a considerable amount of supply comes from countries which do not have easy access to vaccines. Do not be surprised to see more bare shelves as the demand rises ahead reduced production, shipping and distribution.

Aldi says it can weather the food shortage storm

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