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Companies and authorities rushing to avoid supply shortages

. Mar 22, 2020
Companies and authorities rushing to avoid supply shortages during Covid-19 Supermarkets scramble to avoid food shortages. Photo: Fernanda Cruz/ABr

After declaring public calamity in the state of São Paulo due to the Covid-19 pandemic, Governor João Doria made a clear appeal to the population for the coming weeks and months: “Please, only buy enough goods for you and your family.” Despite news of agreements between the government, suppliers, and supermarket associations to ensure there will be no supply shortages in the state, more and more reports of empty supermarket shelves are cropping up around the state capital. As we reported in our March 20 Tech Roundup, the crisis has already hit e-commerce, with the biggest supermarket chains in Brazil unable to send out certain goods and offering long delays for the delivery of groceries. 

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part of the effort to restrain panic buying, hand sanitizer will be sold at cost price in supermarkets and pharmacy chains in São Paulo, but it will be limited to two units per person from March 23 on. Also, the <a href="https://brazilian.report/power/2020/01/30/jair-bolsonaro-reshape-brazil-regulatory-agencies/">National Sanitary Surveillance Agency (Anvisa)</a> has allowed companies to produce and sell hand sanitizer or disinfectant without need for approval, which may help normalize the supply.  </p> <p>According to the Brazilian Association of Supermarkets (Abras), though there have been reported shortages of Covid-19 related products—mainly hand sanitizers—the overall supply is normal.&nbsp;</p> <h2>Demand high and getting higher</h2> <p>The problem is that the demand remains high. According to São Paulo’s Supermarket Association (Apas), stores registered 18 percent more shoppers coming to stores in comparison to February 17. On March 18, 45 percent of stores heard by Apas reported receiving more customers, in spite of the public pleas for the population to stay home.&nbsp;&nbsp;&nbsp;</p> <p>According to <a href="https://www.abras.com.br/clipping.php?area=20&amp;clipping=70365">Abas</a>, “the replacement of most highly demanded products has been requested and distributors are maintaining their operations without disruption.” The association also expects customer flow to get back to normal in the next week.&nbsp;&nbsp;</p> <div class="flourish-embed flourish-chart" data-src="visualisation/1645222"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <div class="flourish-embed flourish-chart" data-src="visualisation/1645122"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p>However, according to Neogrid—a company specialized in supply chain management—the level of disruption in supermarkets has been increasing in the past few days. In January, overall disruption levels measured by the company were at 11.4 percent, falling to 11.1 percent in February and rising to 11.3 percent by March 14. The company attributes that to an increase in purchases of hygiene and cleaning products.&nbsp;&nbsp;</p> <p>“Besides that, as we follow retail stocks, we’ve seen a slowdown in restocking shelves. Since these are not products that employees are used to replenishing, it has taken a little longer to do it”, said Robson Munhoz, vice president of Neogrid.

 
Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Before joining The Brazilian Report, she worked as an editor for Trading News, the information division from the TradersClub investor community.

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