COVID-19 outbreaks at meat-processing plants have cut into supply and forced meat prices upward at major supermarkets in Maine, but grocery chains say they are coming up with solutions to boost inventory and stabilize prices on a variety of goods.

Grocers in Maine and across the U.S. are rebuilding their supply chains after the pandemic disrupted their businesses, first with customers buying up excess supply, followed by viral outbreaks and government-imposed restrictions.

Analysts say shoppers should find that prices and supplies will smooth out over the summer, barring a major resurgence of the coronavirus pandemic.

A Portland Press Herald/Maine Sunday Telegram analysis of prices at Shaw’s and Hannaford Supermarkets, the two largest grocery store chains in Maine, found that prices rose significantly for packaged meat products from mid-May to mid-June, likely the result of temporary shutdowns of meat-processing plants around the country. The shutdowns were caused by COVID-19 outbreaks among workers, forcing the operators to disinfect and reconfigure their plants.

The newspapers recorded prices on 40 items at both supermarket chains across a wide variety of foods and household products. The analysis avoided any items that were listed as on sale, and it opted for the cheapest item when multiple brands were available. While most products did not change significantly in price, there were several notable exceptions.

For example, the price of a pound of 85 percent lean ground beef increased by 20 percent at Shaw’s from May 15 to June 15, and by more than 30 percent at Hannaford. The biggest price increase among the meat products surveyed was nearly 50 percent for a pound of fresh boneless chicken breasts at Hannaford.

Shortages of processed meat have become a national phenomenon, with some analysts saying in May that processing capacity for U.S. beef and pork was down by 40 percent from a year earlier.

But prices on some other products, particularly produce, fell sharply in Maine from mid-May to mid-June, reflecting seasonal changes in supply. The price of asparagus fell by 16 percent at Shaw’s and by 50 percent at Hannaford, for instance, as more of the the vegetable was harvested. Still, freshly harvested asparagus becomes more rare in July, and future prices are likely to reflect that.

Other products fell in price over the one-month period as they became less scarce. For example, a four-roll pack of Scott toilet tissue at Shaw’s was reduced from $10.99 on May 15 to $4.49 on June 15, a decrease of nearly 60 percent. The same product was unavailable at Hannaford when the newspapers’ price survey was conducted.

Some changes in price are more difficult to explain. For example, 16-ounce bags of frozen corn and peas both increased in price by more than 50 percent at Hannaford from May 15 to June 15, while prices on those items remained unchanged at Shaw’s. The biggest price increase at either chain over the one-month period was at Shaw’s for a 6-ounce package of Uncle Ben’s long grain wild rice, which increased in price by nearly 70 percent.

SHORTAGES DRIVE CHANGE

The onset of the pandemic led to stay-at-home orders, with most offices closing and people shifting to work from home. That meant no dining out, and grocers saw a significant increase in shoppers as families were suddenly forced to dine at home for most meals.

That led to shortages of certain items, and manufacturers and store operators are still struggling to catch up on supplies of some products. Both Shaw’s and Hannaford continue to limit purchases on some items to try to avoid shelves being stripped bare.

Empty shelves at the Hannaford supermarket in Scarborough on March 27. Empty shelves are indicative of supply-chain issues that are affecting grocery prices nationwide. Gregory Rec/Staff Photographer

The most dramatic example of an item that virtually disappeared from store shelves at the onset of the pandemic was toilet paper, which suddenly became a hot commodity when the stay-at-home orders took effect.

Supplies of such products have rebounded in recent weeks, however, and prices have come down.

The supermarket chains also have responded to shortages by expanding their supply chains to try to increase their stocks of goods. For instance, Hannaford now sells Holy Donut products, which are made locally, and also increased its orders to Springworks Farm, an indoor lettuce grower in Lisbon. A spokesman for Springworks said Hannaford and the local Whole Foods Market both doubled their orders after the pandemic hit.

The early stages of the coronavirus pandemic caught grocery store executives and the public equally off-guard, said Doug Baker, vice president for industry relations at FMI, the national food industry association. They had to quickly adapt to a new environment with an added emphasis on safety and cleanliness, along with a big increase in customer purchases.

But grocers and manufacturers have made adjustments and are beginning to gain ground on the rush of shopping after the pandemic forced tens of thousands to stay home two months ago, he said.

Cashiers ring up customers at the Hannaford supermarket in Scarborough on March 27. Hannaford stores have installed Plexiglas barriers at the cash registers as a safety precaution for cashiers and customers during the coronavirus outbreak. Gregory Rec/Staff Photographer

“It’s improving, and the feeling is that supplies will be more stable by July Fourth,” Baker said.

Some manufacturers are cutting back on the variety of products they offer, often by reducing the number of sizes available, said Eric Blom, a spokesman for Hannaford. That allows them to concentrate on producing more of their mainstream goods in the most popular sizes, he said, which helps grocers stabilize their supply of inventory.

Blom said many shoppers were stocking up on goods they had neglected before the stay-at-home orders were issued, in addition to having to buy more food for families who were suddenly making most of their meals at home. That accounted for big increases in sales for grocery chains in March and April.

He said Hannaford has continued to increase what it buys from Maine producers. Independent grocers also are focusing more on local goods, said Christine Cummings, executive director of the Maine Grocers and Food Producers Association.

Stores have had a couple of months to adapt, she said, and there have been positive results.

Empty shelves at the Hannaford supermarket in Scarborough on March 27. Gregory Rec/Staff Photographer

“Things are indeed beginning to level out,” she said.

Cummings added that her organization is keeping tabs on the production side to make sure processes are in place for migrant workers to come to Maine for harvesting crops. She said the plan is for “widespread testing” for COVID-19 among those agricultural workers and making quarantine arrangements for those who test positive.

“There are a lot of resources and guidelines” from regulators for how to improve worker safety, Cummings said, and following them should allow for both worker health and maintaining production.

MORE HURDLES AHEAD

One wrinkle for both producers and grocers is the reopening of restaurants to dine-in eating. Many producers had direct-sales agreements with restaurants, and some provided products to the food service industry – such as suppliers to school cafeterias – in larger sizes than would be appropriate for mainstream consumers.

Even though many experts are saying supply chain disruptions are in the rear-view mirror, the reopening of restaurants poses the threat of another disruption, said Joe Pawlak, managing principal of Technomic, a company that provides research on the food service industry.

He said restaurants are going to have to connect again with suppliers, including those that took on new customers when the restaurants were closed to indoor dining.

“It’s going to take some time for things to stabilize,” Pawlak said. “The supply chain is still pretty uneven. It’s lumpy right now.”

And there could be more disruption at the end of the summer, he said, as schools and colleges reopen and managers of those facilities need to resume deliveries of food.

Those facilities will likely operate under new rules – for instance, no self-service at college cafeterias – but the volume of food they provide will likely return to near the level it was before the pandemic, Pawlak said, causing further stresses in the food market. Most colleges shut down early this spring, closing dorms and discontinuing food service while sending students home.

Empty shelves at the Hannaford supermarket in Scarborough on March 27. Gregory Rec/Staff Photographer

It’s not yet clear which among those facets of the traditional college experience will resume in the fall.

Baker, of FMI, said restaurant owners, food service operators, food producers and grocers should be better prepared to act quickly if there are further supply chain disruptions or the coronavirus surges again in a “second wave” in the fall.

This spring, as the pandemic spread, “it’s a lot like we were playing whack-a-mole with this virus,” he said.

Toilet paper, for instance, suddenly was in short supply and prices rose when the product was almost impossible to find through mid-May, but the panic-buying eventually eased, and grocers were able to at least partially resupply shelves.

Baker said ongoing shortages, such as those of meat products caused by shutdowns at processing plants, should ease as operators make changes to the plants to make them safer for workers. But a more permanent stability may have to wait until a vaccine for the virus is developed and workers can get back on the job with less worry about an outbreak, he said.

For grocers, he said, changes made during the pandemic could provide the foundation for future growth.

For instance, he said, many grocers established or beefed up their curbside pickup and e-commerce services. Some, in fact, reopened previously closed stores as pickup-only locations, with only workers and no shoppers inside.

Many customers tried those services for the first time during the pandemic, Baker said, and grocers should be ready to continue them as restrictions ease.

He said grocers who learned those kinds of lessons from this spring’s coronavirus outbreak will be better positioned to survive and even prosper if there’s a second wave or another pandemic.

Related Stories