Supply disruptions may continue to plague operators and suppliers throughout 2021: NACS

water on palettes in a warehouse

ALEXANDRIA, Va. — Supply chain product procurement was a major challenge for convenience stores and their supplier partners during the second quarter of 2021, and the struggle is expected to continue through the rest of the year.

Two in five convenience retailers (39%) said there were "significant" levels of disruption across the supply chain during the second quarter of 2021 and 86% reported that at least 10 percent of their orders were disrupted, according to two new surveys from NACS.

During Q2, beverages were particularly a challenge for convenience retailers, who reported supply disruptions to packaged beverages (72%) and beer (67%). Additionally, two in five suppliers (38%) said they faced "significant" levels of disruption for materials necessary to create their products.

Supply chain disruptions also extended to equipment, with 79% of retailers experiencing delays with store equipment and hardware deliveries. Because of supply chain delays, 41% postponed store equipment orders or new store construction/remodel projects.

Confidence among convenience retailers and suppliers that improvements are coming is low: Only 25% of retailers and 27% of suppliers are confident that supply disruptions will improve in the second half of the year.

Compounded by inventory challenges, three in four retailers (76%) said it was difficult to fill available positions. Only 2% of survey respondents said they did not face hiring challenges.

However, despite the challenges, in-store sales have rebounded to pre-pandemic levels at convenience stores, according NACS CSX sales data ending April 2021. Fuel sales also have largely recovered. Finished gasoline supplied, which is tracked by the U.S. Energy Information Administration and is a proxy for supply, is only 1.8% lower the last two weeks of June 2021 than the same period in 2019.

Another positive to come out of the disruptions throughout the supply channel is the heightened level of collaboration between convenience retailers and their suppliers: 66% of supplier companies noted that their overall relationship with convenience retailers is better than a year ago and 44% said their level of partnership and collaboration with the convenience retailing channel is better than other channels.

"Our industry's resilience has been on display throughout the pandemic and is even more apparent now as the economy continues to bounce back," said NACS Chairman Kevin Smartt, who operates 48 TXB and Kwik Chek stores across Texas and Oklahoma. "The value of convenience has never been higher, and the innovation within our channel to continually reinvent convenience to benefit our 165 million daily customers astonishes me. I look forward to a strong rest of 2021 and beyond."

The NACS Retailer and Supplier Member Pulse Surveys were conducted in June 2021 by NACS Research. Overall, 56 retailer members, representing a cumulative 1,497 stores, and 83 supplier member companies participated in the survey. 

Based in Alexandria, NACS advances the role of convenience stores as positive economic, social and philanthropic contributors to the communities they serve and is a trusted advisor to more than 1,500 retailer and 1,500 supplier members from more than 50 countries.

Originally published by Convenience Store News. 

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