Small, independent grocery stores have emerged as a winner from the current supply chain crisis plaguing the nation, with farmers selling their goods directly to smaller stores as major supermarkets Coles and Woolworths are forced to cancel customer and supplier orders.
Bare shelves have become a common sight in the fruit and vegetable section at Australia’s big two supermarkets in recent weeks, as rising COVID case numbers have forced truck drivers and staff working in distribution centres into isolation, leaving no one available to unload or deliver the much-needed cargo.
On Thursday, Woolworths joined Coles in imposing a selection of two-pack per-customer limits on toilet paper, painkillers, and various meat products due to the ongoing issues in the companies’ warehouses.
However, shortages and product limits have been rare in smaller stores, which often purchase their fruit and vegetables directly from suppliers or from major markets, such as the Sydney Markets in Flemington or Melbourne Markets in Epping.
Guy Gaeta, a cherry farmer from Orange, NSW, told The Age and the Sydney Morning Herald the markets were well-stocked with produce, questioning why the major supermarkets didn’t purchase more goods from its sellers.
“At Flemington markets, there’s plenty of stock. The only thing that’s short is watermelons, and if you pay $3.50 a kilo, you can have all the watermelons you want,” he said. “There’s no food shortage.”
Anthony Patti, store manager at Brunswick-based grocer La Manna Fresh said Melbourne’s markets were also fairly well-stocked, though he noted it was “a bit more difficult” than usual. His store has seen a 15 per cent uptick in trade over the past few weeks, which he attributes to shoppers hunting for in-stock fruit and veg.
“Our businesses are a lot simpler. The farm sends it to the market, we buy it from the market and take it back to the store,” he said. “Supermarkets take it to their warehouses, which is an additional link in the chain where something can go wrong.”
These less formalised supply chains favoured by independents have been a boon to smaller operators all throughout the pandemic, as they can be more flexible than the centralised, mass-ordering distribution systems favoured by the bigger supermarkets.
Independent grocers also order in far smaller quantities than Coles or Woolworths, meaning they can more easily fulfil their requirements from smaller growers at markets.
“We buy a lot more of our produce direct from the supplier, so we can wheel and deal,” independent grocer Fred Harrison – who operates a network of 70 Ritchies Supa IGA stores through Victoria and NSW – said.
“Woolies tends to buy their chicken from Inghams, where we buy our chicken from about 10 different suppliers. We’ve also been around a long time and we have a lot of longstanding relationships, so we can call on a few favours.”
However, Mr Harrison says his stores are still “not perfect” when it comes to supply, with gaps still on the shelves when it comes to more standard products, and notes his stores are still struggling with the same staffing issues as everyone else.
Woolworths and Coles have warned that supply chains issues within the businesses could take weeks to return to normal, with the companies experiencing absenteeism of up to 20 per cent in key distribution centres.
Some suppliers have said that the supply chain pandemic should serve as a wake-up call to the country’s competition regulator, the ACCC, to investigate if Australia’s supply chains are anti-competitive.
NSW Farmers Association president, James Jackson, told The Age and the Sydney Morning Herald the system was currently a ‘duopsony’, where suppliers have only two major buyers for a product or service.
“The ACCC has always wanted proof that our fresh food supply chain has no competition in it, well, here’s the proof,” he said. “It’s only the big supermarkets that have really fallen over with their distribution networks.”
Source: Thanks smh.com