Long empty shelves due to ‘perfect storm’ for supermarkets Related articles

There really is an unprecedented confluence of circumstances in the supermarket world, according to Kitty Koelemeijer, a professor of marketing and retail at Nyenrode Business University. You first mention the recovery after the coronavirus pandemic, after which, according to you, “massive changes in shopping behavior have taken place”. High inflation also plays a role. ‘In addition, you have to deal with the increase in raw material prices and the huge increase in demand from China. And then there is also the increase in labor costs and the shortage of manpower».

Hands in hair

The big problem is that supermarkets can hardly absorb the hit of higher costs. “The business model is always about growth by offering economies of scale, that’s what people compete for,” Koelemeijer explains. ‘In the higher cost situation you can’t just raise prices, so you try to absorb them. Big supermarkets try to do it, but with the low profit percentage they can only do it to a very limited extent. So basically everyone is perplexed.’

If all supermarkets raised their prices at the same time, customers would probably continue to shop at their local supermarket. After all, there’s no better alternative. But adjusting prices is not that easy in reality. “Supermarkets work on long-term contracts and demand forecasting is becoming increasingly difficult,” says Koelemeijer. ‘In the Netherlands alone, the turnover is around one billion euros a week. If you then manage to predict a few percent less accuracy due to these developments, it will increase costs enormously. Then if you’re unlucky, you’re on the wrong side.’

Alternative products

Koelemeijer expects this summer to be better than expected as far as empty shelves remain, although he doesn’t rule out the possibility that some products will remain in short supply. “It could simply be that the availability of some products is decreasing and we may have to find a completely alternative product.”