Independents avoid supply problems by stripping supermarket chain shelves

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As Australia’s big supermarket chains struggle to cope with stock-outs and empty shelves, business is business as usual for grocers and independent retailers.

Jason Cooper, CEO of Fresh State, represents wholesalers in Melbourne Markets and says the pandemic has provided a win for independent players and lessons for big retailers.

“Independent retailers mainly get their products from the central market system…and we don’t have supply issues,” he says.

“For some reason, there are different distribution processes within the industry.

“Was it luck or good management? I don’t know, but the pandemic has definitely shown challenges for (supermarkets) and that’s probably something they need to go back and consider for the future.

More than 5,000 businesses, including independent greengrocers and supermarkets, buy fresh produce from markets for distribution in Victoria and Australia.

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Cooper says that with a larger pool to choose from, any shortages can usually be covered by another producer.

“We have a different distribution model, we’re not tied to any particular system or group of employees,” he says.

“In fact, there are 500 independent businesses operating in the Melbourne markets.

Minimize the risk

“Because you have a few thousand retailers coming in, it minimizes the risk to the supply chain because once they buy the products they put them in their own trucks and take them to their stores.”

The spread of the virus and the isolation of many workers have seen shelves empty at major East Coast supermarkets in recent weeks.

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The national cabinet this week agreed to relax rules for isolating close contacts in a bid to address the growing crisis.

It’s a similar story to the Sydney markets, according to wholesale agent Shaun McInerney.

More than 700 businesses operate stalls and count independent supermarkets among their customers.

“Product comes in and goes out every day and that’s why indies have been able to keep their shelves full,” he told AAP.

“Some of the major retailers would have struggled because…a lot of eggs are in one basket, there are only a limited number of people supplying them directly.”

Commercial diversity

McInerney, who also sits on the board of Sydney Markets, says local independent shops still get the goods they need, although he admits prices can be higher.

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“Shopping at your freelancers is key to maintaining diversity in retail, which equates to diversity in the growing base,” he says.

A wholesaler whose customer base also includes major Australian retailers, says big players need to take stock following problems in their supply chain.

The wholesaler, who prefers to remain anonymous, had his order reduced by 40% by Woolworths in the week after Christmas.

“In the wholesale market, it is crucial to encourage and support independent retailers,” they say.

“Larger retailers could learn a lesson from having a little more diversity in their supply chain rather than keeping it as efficient and low-cost as possible through fewer fulfillment centers.”

-with AAP

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