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June 15, 2021, 7:49 a.m. EDT

Consumers find shortages and higher prices as COVID-impacted supply chains shift for recovery

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Tonya Garcia

Starbucks Corp. /zigman2/quotes/207508890/composite SBUX -0.78% is making headlines , not just for new summer beverages , but for a shortage of ingredients and supplies, making it hard for consumers to purchase their favorite drink.

That’s just one example of the challenges facing retailers, consumer companies, and their loyal shoppers as a supply chain, upended by the coronavirus pandemic, tries to right itself for the post-COVID recovery.

“It is unwinding. In some cases we’re seeing similar effects from the first few months of the pandemic. Some of it is in reverse,” said Dan Kowalski, vice president of CoBank’s Knowledge Exchange Division. CoBank provides loans and other financial services to the U.S. rural community.

Early in the pandemic, some shoppers heading to the grocery store to stockpile food and other items were greeted with empty shelves. Businesses worked feverishly to shift distribution away from restaurants, cafeterias and other away-from-home dining venues that were now off limits during lockdowns.

Fitness equipment and other items also became hard to find as all sorts of activities moved to home offices, living rooms and backyards.

See: What is inflation? Hint: It’s not the 12% increase in rental-car prices last month

Now with vaccines rolling out and consumers heading back out into the world, there’s renewed demand for things that were of no use during COVID.

“There’s a part of the economy that’s been relatively quiet for the last year that’s reopening,” said Chedly Louis, vice president and senior credit officer at Moody’s. “The part of the economy that was quiet is revving up at a faster pace than the manufacturer thought at the beginning of the year. That’s the rebalancing that’s happening in the supply chain.”

Companies have spoken in detail about the supply chain hurdles they’re currently facing.

Read: Swimsuits and luggage are hot items as U.S. shoppers prepare for summer events with relaxed COVID restrictions

Sumit Singh, chief executive of pet-care retailer Chewy Inc. /zigman2/quotes/212690528/composite CHWY -3.43% said on the late Thursday earnings call that a high level of out-of-stock items were a headwind during the most recent quarter.

“This is clearly a supply-driven situation, which we expect to abate in the second half of this year as additional production capacity comes online,” he said, according to a FactSet transcript.

“Until then, we will keep actively managing our inventory and using our recommendation engines to help customers find attractive alternatives.”

Read: Chewy swings to surprise profit, but warns of labor shortages, supply disruptions

Costco Wholesale Corp. /zigman2/quotes/201191698/composite COST +1.04% described a wider range of supply chain problems.

“From a supply chain perspective, port delays are continuing to have an impact,” said Richard Galanti, Costco’s chief financial officer, on the company’s fiscal third-quarter earnings call last month, according to a FactSet transcript.

The company also faced shortages of pallets, ships and containers. Pent-up demand is also an issue.

US : U.S.: Nasdaq
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