Consumers, small businesses feel supply chain break as shortages cause prices to soar

Posted at 1:45 PM, May 24, 2021
and last updated 2021-05-24 19:33:16-04

MILWAUKEE — If you are having a hard time getting ketchup with your favorite take-out or you noticed the cost of your chicken is on the rise, you are not alone. Experts say a break in the county’s supply chain means shortages and price increases, at least temporarily.

Milwaukee restaurateur Samual Yin owns both Marco Pollo and Bento Xpert at 1125 N 9th Street. He says the industry has been hit hard by shortages.

Samual Yin (left) stands next to one of his cooks as they get orders ready at his restaurant, Marco Pollo.

"We see some shortage in ketchup and the supplies as well,” said Yin. “You can see our fork and knife, they are different colors, so it is really hard to get some supplies at this point.”

He says everything from plastic products to oil for the deep fryer is in short supply or has seen a huge price increase. The biggest price spike is in the food he uses the most for both businesses, chicken. Normally, he spends about a dollar a pound.

Samual Yin (left) and his cook stand inside Marco Pollo and next to his other business Bento Xpert.

“That means we used to spend $40 dollars for a 40-pound case in the past. Last week, Monday, we went to Restaurant Depot, the price was over $100 for a case,” said Yin.

Home renovator Kevin Harper owns 311 Investments. He is also feeling sticker shock with his business.

“The biggest thing that is in short supply for the home improvement is actually wood. Two-by-fours went from $2.30 a two-by-four, last year, to around $12, last week,” said Harper.

University of Wisconsin Madison marketing professor Moses Altsech says this goes back to the start of the coronavirus outbreak.

"This is an artifact of the pandemic, meaning that without the pandemic if it never happened these shortages would simply not exist,” said Altsech.

Purdue University, Susan Bulkeley Butler Chair in Operations Management, Ananth Iyer says we have a break in the supply chain. He studies supply chain and operations management. He says an example where it is easy to see the break is in lumber.

Menu showing a chicken sandwich at Marco Pollo in Milwaukee.

"The supply chain depends on forecasts, so when the pandemic hit the people who are in the front lines, the builders and everybody else said well people aren't gonna build houses during the pandemic. So they cut back their orders,” said Iyer.

That cutback went all the way through the chain causing sawmills to shut down. Iyer says when they realized they needed more wood, they were already behind. Consumers are now seeing the break when they make purchases.

"There's a whole series of steps, all the way back to the farm, that is, the supply chain now any one of those links if they get broken, then it affects the person in the store that's looking at the product,” said Iyer.

Consumers, small businesses feel supply chain break as shortages cause prices to soar

The shortage of lumber affects more than just builders. Wood pulp prices have jumped 20-percent. It is used to make most of our bathroom supplies such as toilet paper. Manufacturer Kimberly-Clark said the shortage, combined with people stockpiling goods is leading to prices increasing in June. It says prices will go up on things like its Scott and Cottonelle toilet paper, Huggies diapers, Kotex feminine hygiene products and Viva paper towels.

"Prices will go up. They won't go up exorbitantly, but they will go up. There's only so much that a producer and manufacturer or retailer can absorb,” said Altsech.

For the average consumer, though some things might be harder to find on shelves or higher-priced, many experts believe it will only be a temporary problem.

"I don't think it's a long-term trend and the main reason is that we have to get people back to work, everybody vaccinated, etc. and that process is unfolding. The moment sufficient supply comes in everybody’s interested in competing,” said Iyer.

And he says as long as there are competitive prices, it will help drive down prices to a normal level.

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