Biden meets with retailers for holiday season, supply chain updates

President Joe Biden tapped food and drug chains and other retailers and consumer brands for insight on ongoing supply-chain challenges and their impact on the holiday shopping and sales.

In a roundtable event yesterday, Biden, National Economic Council Director Brian Deese and Office of Public Engagement Director Cedric Richmond hosted 10 companies to discuss their holiday season outlook and efforts to meet consumer demand and tackle supply chain bottlenecks, including at ports.

Participants included Doug McMillon, president and CEO of Walmart; Karen Lynch, president and CEO of CVS Health; Rodney McMullen, chairman and CEO of The Kroger Co.; Meg Ham, president of Ahold Delhaize USA’s Food Lion; Carlos Castro, CEO of Todos Supermarket; Corie Barry, CEO of Best Buy; KS Choi, CEO of Samsung; Ynon Kreiz, CEO of Mattel; David Rawlinson, president and CEO of Qurate Retail Group; and Josh Silverman, CEO of Etsy.

“As we’re looking toward the holiday season, we feel it’s a lot more like the ones we had in the past,” Biden said, citing the progress with COVID-19 vaccines and efforts to address food insecurity. “Consumer spending has recovered to where it was headed before the pandemic. Early estimates are that Black Friday sales were up nearly a third since last year, and in-store sales were up by 40-some percent. We’re hearing similar reports from Small Business Saturday — I don’t have those numbers yet — and I’m sure that some of the people watching this online are also doing a little Cyber Monday shopping right now. 

“The business leaders gathered here today represent a broad swath of American shopping: brick-and-mortar and online stores, national and local grocery chains, our nation’s largest retailer, and makers and sellers of toys, electronics and health supplies,” the president said. “I want to hear from each of you about what you’re seeing this holiday season; how well-prepared you are to have products you need on your shelves; and how you’ve innovated and hired to overcome supply chain challenges and kept workers safe from COVID-19, so that the American people can have the holiday season that they’ve been long hoping for.”

Turning first to Food Lion’s Ham, Biden asked how the supermarket chain fared over the Thanksgiving weekend and whether the company experienced supply issues.

“We have ample product inside our stores for customers to choose from during this holiday [season]. However, they have changed their shopping patterns, and this is our second Thanksgiving, as you mentioned, during the pandemic,” Ham said. 

“First and foremost, we started with an immense amount of planning to be ready for the business and for customers to be able to buy what they need at our stores,” she explained. “And we worked very early with our vendor partners to get clear on our forecasts for the business and what we could do together, from a logistics standpoint, to ensure they had the supplies they needed and we had the supplies we needed to get to the customer. So it was a great collaboration and partnership as we move forward.”

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Biden talks with Food Lion President Meg Ham (bottom right) at the roundtable event. Walmart CEO Doug McMillon and CVS Health CEO Karen Lynch look on via video link.

Ham added, “We had a strong Thanksgiving holiday season and expect that that will continue into the Christmas selling season as well. We have our own supply chain, so we have our own distribution and logistics network that helps us work with our partners to move product.”

Joining the discussion via video link, Walmart’s McMillon gave Biden an upbeat outlook for holiday retail sales, including grocery, and noted that supply chain snags at the ports are loosening.

“We think we’re going to have a really good holiday season. We shared our earnings results a couple of weeks ago, and we told everybody that. And we shared that our inventory levels are up more than 10%,” McMillon said. “So, while we’re all concerned about the supply chain, we have more inventory than we did a year ago and have the inventory that we need to be able to support the business. And we are seeing progress. The port and transit delays are improving.”

Biden cited the efforts of Port Envoy John Porcari in helping the administration work with companies to ease the backlog at key ports like Los Angeles and Long Beach, Calif. The president said those two ports have seen a 40%-plus drop in the number of long dwelling containers.

About two-thirds of what Walmart sells in the United States is produced domestically, while the other third has a “meaningful portion” coming from Canada and Mexico, McMillon reported. 

“For the part that comes outside of North America, the port issue has been a big issue.  But we’ve really seen a lot of improvement. Because of what you all [in the administration] did to help with overnight hours and because of the team’s work to reroute to other ports, to extend our lead times and have other creative solutions, we’ve seen an increase in throughput over the last four weeks of about 26% nationally in terms of getting containers through ports,” Walmart’s CEO said. “In the Southern California ports in particular, where you’ve been really focused, we’ve seen a 51% improvement in that flow-through, and that’s helped a lot as it relates to categories like toys, which are so important for Christmas. So we’ll keep working to make sure that we’re in a good in-stock position as we go all the way through the season. We do expect it to be strong.”

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Walmart’s Doug McMillon told Biden that the company has ‘seen a lot of improvement’ with supply issues at key ports.

Efforts by Kroger include boosting its safety stock for more than 70 critical product categories, leveraging data insights to identify complementary or substitute items to fill customers’ needs in the event of shortfalls, and diversifying the ports of entry that the supermarket giant schedules through, according to McMullen.

“At Kroger, we feel great about our ability to serve our customers’ needs through the holidays. We are grateful to President Biden for inviting us to share Kroger’s unique perspective on providing fresh, affordable and delicious food for customers this holiday season,” McMullen said in a statement. “We thank the Biden administration for their efforts to alleviate current supply-chain concerns. We remain focused on providing a full, fresh and friendly experience for our customers by attracting and retaining workers with Kroger’s opportunity culture, providing affordable ‘Our Brands’ products [and] partnering with suppliers to plan for increased demand.”

CVS Health’s Lynch also cited improvements at the ports and underscored the importance of planning, especially in ensuring enough health care products to meet demand.

“We’re seeing progress with port congestion and staffing levels as a result of the administration’s recent actions, and the outlook for maintaining stocked shelves improves each day,” Lynch stated. “The focus on increased availability of over-the-counter COVID-19 tests has also had a meaningful impact and provides countless families with protection and peace of mind during the holiday season. With regard to our pharmacies, we’ve been able to utilize our expertise and extensive partnerships throughout the supply chain to ensure the continued availability of prescription medications since the onset of the pandemic.”

Castro of Todos Supermarket, a four-store Hispanic grocery chain based in Woodbridge, Va., noted in a statement that independent retailers also must grapple with supply-related competitive imbalances.

“I was honored to represent Todos and America’s independent community grocers during today’s White House roundtable discussion on supply chain challenges,” Castro said. “Although independents are resilient and our customers can rely on us during the holidays, independent grocers unfortunately continue to face competitive disadvantages when sourcing products in short supply. We appreciate the president’s leadership in helping to address the major issues facing retailers and consumers.”

Source: supermarketnews.com

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