![]() ![]() ![]() However, I think transportation will be an ongoing concern. And by the beginning of the fourth quarter, I believe our inventory levels will be close to normal. By the end of June, I believe we’ll see a fill rate close to 90 percent. I think by the end of April we’ll see that number increase to the low 80s. Our raw fill rate is up to about 78 percent. But I do see signs of improvement when you look at particular categories. Wage increases would be about a “7”.Īs far as when we can expect improvement in product availability, that’s very hard to predict. Product scarcity would be the most challenging problem today, so I rate that a “10”. So, as to my take on current conditions, I see the labor shortage impacting our headquarters as a “7”. These shortages also played a significant role in increasing the inflationary cycle we’ve experienced since last year. All labor- oriented factors contributed to shortages in raw materials, packaging, transportation, distribution, and production. People exited the workforce for several different reasons and in a large part haven’t come back. And when do you believe we’ll see some improvement in the big picture?Ī: In my opinion, all the supply chain problems are labor related. Q: Regarding supply chain dysfunction: on a 1-10 scale (with 1 being the least critical and 10 the most critical) rate these current problems as they relate to Key Food from both the supplier and member perspective: labor shortages product scarcity/allocation issues wage increases. In the end, I think our members acknowledged some of the harsh realities of the situation and made the adjustments necessary to keep their businesses productive. When you have your weekly sales volume increasing at least 50 percent seemingly overnight, there’s no way that a supply chain meltdown won’t occur. For the past 30 years, manufacturers shifted to a “just in time” distribution model. They utilized every resource and contact they knew to get product when bigger chain retailers could not. However, no one should underestimate the resourcefulness of the independent retailer. We also helped provide things such as masks and hand sanitizers for them to ease some of their day-to-day worries. We had weekly video calls with our members to update them on supply issues and changing mandates that, depending on where your stores were located, were not uniform. Assurance that during these difficult times we would continue to support them.Ĭommunications were also virtual with the type of unique structure that we operate under. In the end, we felt that we needed to run an ad to provide confidence and assurance to Key Foods’ consumers. Because of our diversified membership we had some differences of opinion on issues such as continuing to run a weekly ad because of product availability challenges. Once we settled in, our ability to continue to support our members and consumers became a major concern – due to the rapid inventory depletion and the withdrawal of trade support. Operating from a virtual environment was totally new to us – we had to adapt quickly. Our team generally chose to work remotely as we were literally moving. In March 2020, when the impact of COVID was causing businesses and school shutdowns, we moved our offices from Staten Island to our current headquarters in Matawan, NJ. Q: What were the greatest challenges facing Key Food during COVID? Were there any unique issues that you had to deal with in dealing with a co-op structure with a diverse membership and sometimes different priorities?Ī: We had several challenges that others in the industry faced and some which were unique to Key Food. George shares his views about navigating through COVID with a diverse and independent customer base, the challenges created by supply chain dysfunction and the evolving landscape in the markets where Key Food’s members operate. ![]() Welcome to Leading Edge, a semi-monthly Q&A forum where some of the grocery industry’s top executives share their views on several current and important topics. This week’s interviewee is George Knobloch, chief operating officer of Key Food Stores, the Matawan, NJ-based grocery co-op whose 160 members operate 357 stores, primarily in the competitive and unique New York metro marketing area. ![]()
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