Credit: Cactus

In the current State of Emergency in Luxembourg, a lot of attention has been focussed on those working in the medical sector and food retail trade.

Regarding the latter, it is not just the supermarket staff at the frontline staff that we see when doing our shopping, but there is a massive supply chain in operation behind the scenes to ensure that consumers can continue to obtain all of their usual products from the supermarket shelves.

Current trends have evolved due to the COVID-19 pandemic and restrictions placed on harvesting, transport and consumer demand, either directly or indirectly, with all affecting the overall supply chain.

On some products, such as meat, poultry, fish and locally-sourced products, e.g. potatoes, prices are not expected to change; if they do, they are likely to fall, not rise.

For fruit and vegetables, most of which come from southern EU Member States (heavily impacted by COVID-19), the main challenge here is three-fold: (1) the people who normally undertake the harvests come from Easter Europe and have returned to their home countries as borders closed; (2) the road transporters who used to have full trucks going in both directions now have no goods/cargo going south due to factory closures and therefore the cost of transporting goods has been borne solely on goods transported north; also (3) drivers are concerned for their health and have experienced a significant reduction in truck stops as motorway service stations have closed, reducing the number of available toilets, showers and hot food amenities available.

A statement from La Provencale mentioned the above and also explained that panic buying at the start of the State of Emergency meant that demand "exploded" regarding various items, leading to a doubling or tripling of prices across the EU, not just in Luxembourg. They also added that dairy products, dry, frozen as well as non-food products have not experienced any abnormal price variations.

La Provencale, which employs 1,400 staff, has reported a weekly net loss of around €1 million per week - this figure is after the benefit of state aid including partial unemployment due to force majeure.
 
Cactus supermarkets recently announced a €700 bonus for all staff as well as closure on Sundays to give staff a break from the intensity of the past few weeks.

Early on in the State of Emergency, there was panic buying of toilet paper. Cactus' suppliers of such products are located in Germany, France and Belgium who all are facing an increased demand. As a result, they adapted their production chain to become more efficient: they now produce less different kinds of toilet paper but are able to produce more in quantity to match the high demand.

There is still a shortage of liquid soap and other products. When Chronicle.lu asked Cactus about products are most affected and from where do they source such supplies, their spokesperson responded by explaining that it is important to differentiate between soap (solid and liquid) and hand sanitisers. Regarding the latter, Cactus adapted the rhythm of their orders and the range of products. They receive frequent deliveries so that they do not expect to run temporarily out of stock on those items in the upcoming weeks. As for soap, they explained that it is a bit more difficult to get the desired quantities, but they are adapting and doing their best to always have alternatives available whenever one brand is temporarily out of stock. 

Cactus also reported difficulties in sourcing pasta, rice and flour, for example: these products have been subject to an increased demand which the factories, some of them located in Italy, had to face. Moreover, there have been delays in deliveries due to increased controls on the borders which led to sizeable traffic jams. In order to work around these issues, Cactus adapted the rhythm of their orders and incorporated new products (e.g. a new brand of pasta or just a different size of packaging if available). "By doing this, we can guarantee, that even if a given brand of pasta or rice might be temporary out of stock, due to delayed delivery, we still have a wide range of alternatives to offer" Cactus' spokesperson explained.

Other products that ran out (temporarily) on supermarket shelves include potatoes, flour, eggs and chicken: for these, most suppliers are local and these now appear to be all back in regular supply after initial panic-buying subsided.

Naturally, there have been some price rises. According to Cactus, those have been limited to some fruits and vegetables, "up to now, we did not have to face significant increases in prices".

In the supply chain, Cactus explained that transport has been a bit more difficult, particularly at the beginning of lockdown; however, it seems like it has been leveling off in recent days.

Chronicle.lu also talked with Home from Home in Strassen: they explained that there have been "real problems obtaining stock as panic buying has caused real problems across the supply chain. Talking to suppliers in the UK, the story is the same everywhere, manufacturers are working at 250% of normal capacity but struggling to catch up at the moment".

Their modus operandi is "impossible at the moment, we have to obtain stocks in different ways, more increasingly we are having to use wholesalers, which obviously has had dramatic affect on cost prices". However, "they do not envisage this to last for too much longer (5 weeks, perhaps) so are not passing the increases on".

They also explained that certain stocks, flour, yeast, frozen goods across the board, sausages and bakery goods have been exceptionally difficult to obtain. Prices on breakfast cereals, tea and butter have taken a hike (hopefully temporary again)

For them, logistics costs are up as they are not allowed to travel to the UK to procure stock at the moment due to travel restrictions in France which will hopefully ease shortly. Their biggest problem is obtaining ordered stock - they received approximately 30% of their last orders, and where in the past items that did not arrive were marked "to follow", they are now simply marked as "not available". Nevertheless, they are expecting a bumper delivery this Friday including almost all the usual products.