A case in point: Giants like Walmart, Home Depot, and Dollar Tree have chartered their own cargo ships to sail to smaller ports like Houston, Texas, and Everett, Washington, avoiding weeks-long waits at the heavily trafficked ports of Los Angeles and Long Beach. SMALLER RETAILERS SIMPLY CANNOT COMPETE with their bigger rivals in a supply chain scramble. “But it has drained the life out of local communities and created a kind of despair across many parts of this country that are struggling.” “The conventional thinking of the last 40 years is we don’t need small-scale producers and distributors because bigger is much more cost-effective,” said Stacy Mitchell, co-director of the Institute for Local Self-Reliance. As the biggest players eliminate competition, workers earn less and communities lose key services. The rapidly consolidating market has broader implications. Though the maneuvers keep consumers happy, small businesses have suffered: They wait longer for goods, pay more for shipping, and lose business as customers flock to big-box stores. Amazon, Walmart, and other giants have maintained their inventory by expanding logistics operations and striking deals with suppliers, allowing them to get products quicker and cheaper than their smaller rivals. “There are some products that are just gone, and you just have to find something else.”īig-box stores, however, have circumvented many of the bottlenecks. “I have a product that’s been on back order for over 500 days,” said John Ciferni, who owns Tarzian Hardware, a 100-year-old hardware store in Brooklyn, New York. Restaurants, toy stores, booksellers, indie clothing brands, and hardware stores have strained for over a year to meet rising consumer demand. A study by the Federal Reserve found that about 800,000 small businesses closed in the first year of the pandemic, about 200,000 more than the annual average. Small businesses in particular have paid a steep price.
Each link in the supply chain has frayed, and even though Americans spent more on goods since the pandemic than ever before, the snarls have inflated the costs of production and shipping. Nearly every industry has suffered shortages from supply chain backups since the first COVID-19 outbreak in early 2020. “It takes him about three hours every day, when it used to be maybe 30 minutes before.” “My meat department man will start at about 3:00 every afternoon on the phone, and it takes him until 6:00 each night to call suppliers and see who’s got this, who’s got that,” Wright said. But Wright, who has run the market since 1997, said it’s never been so hard to stock up on inventory, and that the process of simply getting supplies overwhelms his employees. “When a product was there, we’ve had to try to buy all we could buy.”Ĭustomers still frequent Wright’s Market, which is located five minutes outside of downtown Opelika, a small city of 30,000 that borders Auburn University. “We’ve just had to be creative,” Wright said. Since the pandemic began, manufacturing slowdowns, worker shortages, and volatile demand have dogged the grocery industry, forcing grocers to find new ways to stock their shelves. The investment paid off: Wright’s Market entered the holiday season with goods that were sold out elsewhere, like cream cheese and cranberry sauce.īut this was a bright spot in an otherwise bleak couple of years. To prepare for the shortages, he began stockpiling products in early November, spending $70,000 on top of the $250,000 he usually devotes to inventory. Since the beginning of the pandemic, he had struggled to maintain inventory at his sprawling store in east Alabama, and as the holidays approached, he anticipated that annual favorites-hams, gingerbread men, pies-would be in short supply. Grocery store owner Jimmy Wright spent months stocking up for the holiday season. This article appears in The American Prospect magazine’s February 2022 special issue, “How We Broke the Supply Chain.” Subscribe here.
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