Foodstuffs North Island boss Chris Quin has been going full-throttle at a time when the rest of the nation is in lockdown. Photo / File
Much of the country may have hit a standstill amid the lockdown conditions, but the supermarket industry has never been busier.
Massive demand, long queues and panic-buying are putting enormous pressure on staff to keep shelves stocked at a time when even being at work poses a risk to your health.
With competition reduced to two major providers - Foodstuffs and Countdown - there have also been accusations of in-store price gouging levelled at the grocery giants, who some consumers believe might be taking advantage of the situation.
These numerous issues have led to a steady stream of questions to the Herald from readers demanding answers from the nation's supermarket chains.
Heeding that call is Foodstuffs North Island boss Chris Quin, who agreed to answer some of the most common questions that readers have sent in.
In many ways, it's a privilege to be open and trading but it's also a massive challenge and responsibility. New Zealanders right now want to know that they can access the basics, that they can get food, that they can get the grocery products for their houses, and that they can make that work. So we've got to step up to that challenge.
So far, we've seen phases in the demand. From the first case on February 28, we just went through this unbelievable phase where we were all wondering why the hell is everyone buying toilet paper. For that period we were just in demand overload mode. We were just trying to get product through the supply chain to stores and available as hard and as fast as we could.
You just don't have a supply chain ready for this. In order to keep prices low and compete, you keep your costs as efficient as you can. This means you just don't carry the capacity. You try manage to a very tight forecast and have enough to deliver to that. But suddenly, all the rules went out the window.
Look, we're now 13 days into lockdown. We're still learning how to operate and how to do things. The first three or four days were actually quite quiet. I think people went home and into lockdown. And they went: "Okay, what's in the cupboard? What do I need? How do I shop? Where do I shop?"
What we're now seeing is a level of shopping that combines the normal shop with the added pressure of other stores being closed. Then you also compound that with the restrictions that require us to keep people two metres apart. There's quite a calculation that goes into this. You have to look at the floor area of the building, the number of staff and how many customers should be shopping at any time. That all needs to be managed store by store.
One of the things our digital team have worked out pretty quickly was a system where you could turn up to the door and text a code for the store. That would give you a digital place in the queue and then you sit in your car, out of the rain, wind or sun. You would then be given a five-minute heads-up to say you're up and it's time to proceed to the door. We're trialling this at a couple of stores and we're looking to roll it out at as many stores as makes sense for us.
We're doing everything we can to bring up capacity because we're roughly delivering twice as much as we ever have. We've currently got demand that is three or four times as much so we're trying to close the gap between those two and get into sync for our customers.
We've currently got six stores doing midnight packing gangs and we're also working with new courier and transport partners to improve our scale. We're currently also changing up our technology to make it simpler and easier to use.
We are also building more physical click-and-collect capability in the stores, with new lockers and different models that could involve something like having a trolley wheeled out to you when you arrive.
We've developed a piece of technology which prioritises genuine cases of people being isolated, physically unable to get to a store or those diagnosed with an illness that requires them to stay within their bubble. One of the hardest things we've seen is getting that system robust so that people don't game it. You'd like to think that shoppers didn't, but people are pretty innovative when it comes to sneaking in. It's not evil. It's not totally bad behaviour. But we're trying to tell those people that this is for the most vulnerable.
We've also got some great stories about how store owners are helping their communities. For example, at my chairman's store, Pak'nSave Tauranga, his wife is doing a dozen to 15 deliveries to the elderly and vulnerable daily. Things like this are happening all across the network.
They're just New Zealanders like all of us, right? So they carry the same fears and concerns. They have families at home. They're worried about staying safe and looking after the people they live with.
We're doing everything we can. In the last couple of days, we got masks and other supplies stabilised and able to be in every store. That'll make a big difference. We worked hard and tapped some of our global partners and managed to get some stock in the country in the last 48 hours.
It is incredibly humbling talking to staff at the moment ... because they all have this real sense of duty about what their job means and why it's important for right now.
Look, it's hard and long hours at the moment. People are working hard. And 99 per cent of New Zealanders have been fantastic, smiling, waving and saying "thank you". But there is that 1 per cent who is letting their pressures bubble up and burst out at the supermarket. We're just trying to say to those guys: "Be kind, we'll help you, don't bring it here because it's not good for anyone if you do, and try to shop as normally as possible."
There are some principles people need to remember and take comfort from. Firstly, New Zealand is a net food producer; we make more food than we consume. So while you're not necessarily going to get everything in the brand, flavour and model you love, there's going to be enough food to go around.
Point two is that our supply chain has been pumping every day at over 200 per cent of normal volume since February 28. So when people ask "Where has the flour gone?" the answer is "in a lot of cupboards, in a lot of homes".
This is where the details matter. In the last three or four days, we've got 50 to 60-plus tonnes of flour delivered through the supply chain and out the store - and it's going.
We've tried to help suppliers by simplifying down to one brand and one pack size, just to enable them to do longer runs of more quantity. Under all the stress we had a machinery breakdown about a week ago. It was just dumb luck. It had nothing to do with coronavirus, but it affects everyone's perception. That said, the last couple of days have been a lot better with regular availability of supply.
We'll see a couple of things. One is that we'll see the world competing for product. As coronavirus measures hit other countries, then we'll start to see some products that are globally made, which we love, in shorter supply or not be available for periods. This doesn't mean we won't have substitutes, but there'll be gaps and holes and changes that people will scratch their heads about.
You just need to look at what's going on in the rest of the world to understand. As countries go into their own lockdowns, we will see differences. A wide range of brands will not necessarily always be there, but there will be a substitute ... Fortunately, Easter got done well before, so Easter eggs won't be a problem.
New Zealand manufacturers are all trying to operate in an alert level 4 way, which is not the most efficient or productive way. People need to keep apart, people need to work in smaller groups, people need to have protective gear, all that stuff slows it down a little bit. So it does slow the throughput of manufacture.
In our business, since February 28, we've hired 1300-plus people. I don't know what's happened to the cost picture [due to those hires]. I won't be able to tell for a few more days. No one's thought about it. We've just gone: "What do we need to put in place to keep our stores stocked as possible and to give New Zealand assurance that there will be product on the shelf and that they can rely on the system here to look after them."
To understand what motivates people to panic buy, you need to go to the bottom of Maslow's Triangle. You go: "Am I Okay? can I feed my family? Can I look after the people in my household? Will there be enough stuff?" And while our rational brains says 'of course, there will be, just buy what you normally would'. Our emotional brain says: "I'll make sure I'm okay."
Everyone does that and that's what we saw on February 28, right when the first case was announced on Friday night at about 6.30pm. I remember it vividly because my phone started going off as people started attacking stores. I think there were certain groups in New Zealand getting information from families offshore, advising that they would need to go and fill their house with enough for two weeks because you're going to be isolated.
That resulted in a classic roll-on effect. People started sending videos to their friends, then those friends did the same. And so it went. For three or four days it was restricted to certain groups of customers, then after that it became everybody and we had four weeks of panic-buying.
This fed into the lockdown, where all other retailers were closed, so the funnel was all coming in through supermarkets. And that's what's causing the feeling that it's overloaded. You've got a demand load with a constrictive resource starting to show up.
The first thing is don't transcribe what you see happening overseas to New Zealand. Many countries are not food producers. They are food importers. We are a food producer. So just think about that and chill. Also, follow advice like doing your shop once, use digital tools like Google Maps to pick a time that isn't too busy.
We're also introducing a few innovations like the digital queue. We're expanding our capacity as fast as we can online. These are all things that will help keep it under control while we go through what will, hopefully, be another two-and-a-half weeks. But who knows? We need to prepare for longer. And then if it doesn't, then that's good news.
We thought about this right at the beginning. We stood back and analysed the phases that we were going to run through. Following any phase of huge demand, you often have the suspicion that people are creaming it or they are price gouging. So we decided that we could not be guilty of that.
We put in place measures about seven weeks ago which give an indication of what the basket of normal goods in an average trolley would cost. I've been tracking it every week and we've kept it within a very tight range.
It does move a little bit on fresh pricing. Cauliflower was the big moment that some people focused on. But there has been an ongoing drought and cauliflowers need a lot of water. It's just a supply and demand thing that would be going on regardless of coronavirus.
Normally we have between 4000 and 5000 specials a week. Last week, we had 4800.
This is social license stuff. If you take advantage of people during this time, you deserve to get hurt. We have not done that.
Eight and a half. The Government has been engaging and have listened to us, which is incredibly valuable as the situation evolves daily. Now that there is a plan, we have a responsibility to give it our all and go for it.
The difference between say a GFC and this is that we have strong banks. We've often thought about the returns of those banks, but I guess right now, we'd be happy that the balance sheets are pretty strong. We also have industries that are not affected, in particular agriculture, so that's something to stand behind. We also have an industry that's going to be affected for quite a long time: tourism. And the question is how are we going to help it recover? And then how are we going to support the people who can't be in it for the period of time?
I've got close friends who own and lead tourism companies and it's horrific what they and their teams are going through. It's very different to the pressure we're under. They've got a much, much bleaker story. We've got to think of how to correct that.
One of the things I'm a fan of is keeping people employed in businesses that will exist productively and successfully after this. There have been some concepts in other places in the world where the government's support for employment is going to the company to keep people employed. Then when the recovery comes, it's a fast start. It's not like I've laid off everyone and then need to recreate my company.
I think it's that fast-start planning that needs to be done right across the economy. We have to go: "Where are the fast starts? And how do we get right behind them? Where are the places that are going to require a much longer recovery? And how do we redeploy resources to other places?"
As long as it takes to get a strong and sustained result, and it will all be driven by how seriously New Zealanders take the processes the Government has laid out.
- Additional questions by Andrea Fox.
The company employed a lot of immigrant workers as contractors now owed money.