Omicron compounds employee scarcity, provide chain woes for retailers

One shelf stands empty while customers shop in Columbus, Ohio.

Matthew Hatcher | Getty Images News | Getty Images

Shorten store opening hours, temporarily close locations, and send letters of apology to customers for long lines and late appointments.

These are some of the unusual steps retailers and restaurants are taking when Covid cases rise across the country, fueled by the fast-spreading variant of Omicron.

Corporations no longer worry about state and local governments shutting down stores.

Instead, companies struggle with labor shortages as people call in sick, become exposed to the virus, or seek childcare. And there is a risk of further supply chain problems as the highly contagious variant spreads around the world.

“There’s no question that staffing is definitely a big issue this time around,” said Stephanie Martz, chief administrative officer and general counsel for the National Retail Federation. “It was perhaps less measurable when we were at one point in the pandemic when so much was closed and everything so scaled down.”

“I don’t know if I would go as far as to say that we have an unprecedented number that can’t work, but it’s high,” she said. “It’s really high.”

Covid cases have increased. According to a CNBC analysis of data compiled by Johns Hopkins University through Thursday, the US reports a seven-day average of about 600,000 new cases each day, an all-time high, and up 72% from the previous week.

Source: Lauren Thomas, CNBC

An increasing number of sick, exposed or overworked workers has caused retailers and restaurants to take unusual steps as their existing work problems worsen. Macys Shortening hours of operation in locations across the country for the remainder of this month. Walmart almost 60 stores in coronavirus hotspots temporarily closed in December. And other employers, including Starbucks, Chipotle and Nike have been forced to close some of their doors as they simply don’t have enough people to keep them open.

Walgreens Sent an apology email to customers this week noting customer complaints about long lines, out of stock items, and delays in Covid vaccines or test appointments. In the note, the company’s executives mentioned the many tasks that pharmacy staff juggle – namely dispensing over 55 million Covid vaccines and more than 23 million Covid tests while filling out over a billion prescriptions annually.

“The system has been under heavy load,” said James Kehoe, chief financial officer of Walgreens, on a conference call on Thursday on the company’s results. He said the company will spend around $ 120 million more on workers to help its elongated, thin workforce.

Morgan Harris is the shop owner of the Green Bambino in Oklahoma City. She said the store, which sells baby items from toys to strollers, is facing staff shortages and she feared it could get worse.

Morgan Harris

Regular opening times go ‘out of the window’

For understaffed retailers, reducing working hours is one of the first logical steps, said Craig Rowley, senior client partner at Korn Ferry and director of the company’s retail division. Some stores will be scaled back on weekdays when only a small percentage of sales are happening compared to busier weekends, he said.

He said pandemic-related changes could lead retailers to permanently rethink store opening hours, especially as more sales go online.

“The labor shortage of [Covid] goes to almost any customer-facing business, “said Rowley.

Morgan Harris owns Green Bambino, an Oklahoma City store that sells baby items such as onesies, diapers, and toys. She said she had to ditch one of the most important retail rules as it operates with four employees – less than half of the 10-15 people she would have expected. The store had to change its schedule. It is now open five days a week instead of seven.

Now she sees some corporate giants doing the same when they are hit by the “Great Resignation” and further squeezed by the wave of omicrones.

“In the past, you never changed your opening times in retail,” she said. “That’s out the window.”

Some companies have gotten better at using technology to notify customers of staff shortages or store closures. For example, a understaffed Chipotle location can turn off digital orders through their app and instead focus on in-store transactions while nearby restaurants take delivery and online orders.

Rowley said the good news is that retailers and restaurant chains at least survived the vacation rush. “The workforce is no longer what it was before Christmas, so companies have that advantage,” he said.

Retailers could even ask temporary vacationers to stay in the New Year and work extra hours, he added.

However, Harris said she feared Green Bambino may have to deal with leaner staff even if sales skyrocket. Annual sales rose to nearly $ 900,000 last year – 23% more than in 2020 and 14% more than before the pandemic in 2019.

Applications have slowed down to a trickle despite seeking the help of a recruiter. And she said the omicron wave hasn’t reached the region yet – which could mean more employees calling in sick.

“I assume that our staff will continue to shrink and not get bigger,” she said. “I have very little hope that all of a sudden we will find all these great people and attract them.”

In addition, the recent wave of the pandemic could further delay the return to continuous deliveries of popular baby items such as car seats and strollers. The business is pulling out of the furniture business due to delivery delays and higher freight costs. It stopped accepting deposits for many items because it couldn’t predict if – or when – those large items would be back in stock.

“I don’t feel like I’m reinventing business every two weeks like I was in 2020, but we have no idea what business to do after the pandemic,” she said. “The uncertainty will linger for a few more months, if not longer.”

A customer waits for a contactless roadside pickup at the Recreational Equipment Inc. (REI) flagship store in Seattle, Washington, USA on Thursday, May 14, 2020.

Chona Kasinger | Bloomberg | Getty Images

Muscle memory

Shoppers, on the other hand, have continued to spend money – even with some browsing online rather than down aisles or switching to roadside pickup or home delivery, which have become part of their muscle memory.

According to a survey by Coresight Research of more than 500 US consumers on December 27, compared to the previous weeks, avoiding some public places has crept in again slightly. An increasing number of consumers said they were withdrawing from activities such as international travel and using public transport. Almost 66% of respondents said they avoid any public place – up from 62% when the survey was conducted on December 13th.

About 38% of respondents said they avoided shopping malls and shopping malls and about 33% said they avoided restaurants, bars and cafes, up from 32% and 30% two weeks ago.

However, the company’s survey showed no significant changes in what consumers were buying or how much they were spending.

The hospitality industry may find itself in another downturn. Restaurant analyst Black Box Intelligence found that restaurant sales declined for the first time since mid-March in the week ending December 26, but the reversal was largely due to Christmas, which fell on a weekend that year, and the rise in omicrones .

OpenTable data shows that in the United States, fewer seats were reserved with online, phone, and walk-in reservations in the first week of 2022 compared to pre-pandemic levels, but consumers could have take-away switch or try to stick to New Year’s resolutions.

If that happens, it could mean Americans are spending on things rather than services. Christmas sales were well on their way to hitting a record high of up to 11.5%, according to the National Retail Federation. (The final numbers won’t be released until the end of next week.)

The retail company’s chief economist, Jack Kleinhenz, said: Increased consumer appetites for goods and reluctance to spend on travel, restaurants and other expenses could fuel inflation.

John Mercer, research director at Coresight Research, said that for the most part, shoppers “roll their eyes, take a deep breath, and sigh, and then move on as much as possible.”

“It’s very different this time,” he said. “Consumers were jabbed twice, three times. You have seen this before. It’s really obvious that Omicron is generally much weaker in other countries. “

Almost three in four Americans are fully vaccinated as of Thursday, according to the Centers for Disease Control and Prevention. To date, 73 million people have received a booster vaccination – that’s roughly 22% of the US population. And on Wednesday the CDC gave the go-ahead Pfizer and BioNTech‘s Covid Booster Shots for children from 12 to 15 years.

And there is some evidence suggests that Omicron is milder than previous variants, according to World Health Organization officials.

That could begin to change the outlook for Americans who get sick. The country reports an average of around 1,250 deaths per day, Hopkins data shows, well below the record highs after last year’s Christmas season, when the daily average was above 3,000 for about a month from January 2021. The death toll tends to fall, but the number of cases and hospital admissions increases.

Martz of NRF said both retailers and consumers understand the coronavirus better. That has led to a greater emphasis on tools like booster shots, home Covid tests, and better masks, rather than wiping down counters or installing Plexiglas panels.

One way the industry is moving forward is to host their annual conference in person. NRF’s Big Show is next week in New York City at the Javits Center – previously a mega-center for Covid vaccines and possibly the source of the first known case of omicron spread in the United States.

Martz admitted the conference will look different than it did before the pandemic. All participants must wear a mask and present a vaccination card. The booths in the showroom may have fewer staff. And the trading group will distribute Covid tests at home and host a mobile testing unit.

Up to 20,000 visitors are expected – around half of the visitors in 2019.

Still, she said, it feels right to move forward as the frontline retail workers go to work in person, day in and day out.

“We believe this is a reasonable time to somehow get back together,” she said, although “it won’t look like our shows have done in the past.”

CNBCs Nate Rattner, Lauren Thomas, and Amelia Lucas contributed to this report.

Ford’s U.S. gross sales continued to get better from chip scarcity in October

Bronco SUVs in production at the Ford Michigan plant, June 14, 2021.

Michael Wayland | CNBC

DETROIT – Ford engine US vehicle sales showed positive signs of recovery from a persistent shortage of semiconductor chips that devastated the global auto industry this year.

The Detroit-based automaker reported sales of 175,918 new vehicles in October on Wednesday, a 4% year-over-year decline but a far smaller loss than in previous months. The sales are Ford’s best since April and the first time since May that the company hasn’t reported a double digital monthly loss compared to 2020.

“In June of this year, Ford retail sales grew 10.7%. With limited inventory and record turnaround rates in the second quarter, we worked closely with our dealers to collect retail orders that were up 16x year over year, ”said Andrew Frick, Ford vice president of sales in the US and Canada .

On another positive note, Ford said vehicle inventories did that were at record lows due to the shortage of chips increased by 7,000 units compared to the previous month to 243,000 cars and trucks.

Ford’s sales outperformed the industry last month, according to Cox Automotive. The auto research firm estimated on Wednesday that new car sales in the US were down about 21% compared to October 2020. That’s better than Cox’s original forecast of a 30% decline.

“The market is still experiencing very low inventory levels and correspondingly low incentives, but the worst is probably behind us,” Cox said in a press release.

Ford is one of a handful of automakers that report new vehicle sales every month. Others like General Motors and Stellantis (formerly Fiat Chrysler) only report quarterly sales.

Ford’s October sales come a week after the business Wall Street earnings expectations nearly doubled for the third quarter and increased its adjusted earnings guidance for the full year from $ 9-10 billion to $ 10.5-11.5 billion.

However, Ford is not yet clear about its semiconductor chip offering. CFO John Lawler said last week the company expects the chip shortage to continue into next year and possibly to a far lesser extent into 2023.

According to Lawler, Ford expects wholesale vehicle volume to grow 10% in 2022 compared to this year as semiconductor shortages continue to affect business.

Will throwing cash at drivers resolve the trucker scarcity downside? – RetailWire

July 30, 2021

A truck driver shortage, which has contributed to the ongoing disruption in the supply chain, has been a challenge for over 15 years and is only expected to get worse.

The American Trucking Associations (ATA) said prior to the pandemic that The trucking industry faced a shortage of nearly 61,000 drivers and would need to hire around 1.1 million new drivers over the next decade to keep pace with rising freight demand.

Noisy AT A, the problem can be seen in the relatively high average age of truckers – 46 – and the fact that only seven percent of truckers are women. Extensive regulations, the pressure to make deliveries on time, and long absences from home have long dampened the truck driver’s career.

More recently, headlines about the potential of autonomous driving may have put off young applicants. The shift to e-commerce accelerated by the pandemic has allowed long-haul truckers to step into positions on UPS, FedEx or Amazon.com that more regular routes close to where they live.

To meet demand, private fleets have increased truck driver wages from $ 73,000 in 2013 to more than $ 86,000, according to one ATA survey.

As CNN However, as recently reported, the salary increases are causing many drivers to move from one company to another, implying an annual turnover rate of 95 percent for truck load carriers. With the extra pay, some choose to work less in order to spend more time at home.

Legislators could be urged to improve working conditions for truck drivers. In the UK, the government has just relaxed the rules on how long truck drivers can work. The ATA urges regulators to lower the minimum age for truck drivers from 21 to 18.

Dollar general began offering truck drivers a signing bonus of $ 5,000 in mid-July, which was to be paid out within the first six months of their employment.

Walmart began to offer $ 8,000 sign up bonuses In April for drivers who promise to earn up to $ 87,500 in the first year. Walmart’s offerings included activity, training and mileage payments from day one; quarterly bonuses for safe driving; weekly home time; and up to 21 days of paid time off in the first year.

DISCUSSION QUESTIONS: Will higher and higher wages likely be the most useful in addressing the trucking shortage, or does retail need to re-prioritize careers in other ways? What less obvious solutions do you see?

Brain trust

“Improving working conditions and the time pressure truckers have to work in is the only way to attract truckers.”

wpDiscuz

Instances, fatalities rise as oxygen scarcity persists

A Covid-19 coronavirus patient breathes with the help of oxygen provided by a gurdwara, a place of worship for Sikhs, under a tent on May 6, 2021 on the side of the road in Ghaziabad.

Prakash Singh | AFP | Getty Images

India again reported a record number of cases and deaths Thursday as it faces a devastating second wave of Covid-19 infections that has brought its healthcare system to the brink of collapse.

Health ministry data showed 412,262 new cases of infection were reported over a 24-hour period, bringing the total to over 21 million – days after crossing the 20 million mark on Tuesday.

India also reported the highest daily death toll, with 3,980 deaths. However, media reports suggest that the death rate is underreported.

prime minister Narendra Modi The government has been criticized for allowing large crowds to gather for election campaigns and religious festivals earlier this year, and for failing to anticipate or prepare for a second wave.

India’s oxygen crisis

Falls began to rise in February, but the second wave accelerated in April. The resurgence overwhelmed hospitals struggling with bed shortages and limited supplies of oxygen and medication to treat patients. The international community has pledged to send medical aid in the form of oxygen cylinders, concentrators and other medical supplies. Some of these aid deliveries have arrived in India. According to reports.

However, the situation has not eased as the number of cases increases, as does the severity of those cases, according to Abhay Soi, chairman and general manager of Max Healthcare, which has hospitals in Delhi, Maharashtra, Punjab and Uttarakhand.

“That basically means the need for oxygen is increasing too,” he said on CNBCs Tuesday.Road signs Asia.“”

“Typically, an intensive care unit needs two and a half to three times the amount of oxygen a ward or patient needs in a bed. So if criticality increases and mortality increases, oxygen demand will increase too,” he said.

Soi stated that Max Healthcare runs approximately 4,000 RT-PCR tests in the Delhi area every day. About a week ago, these Covid-19 tests had a positivity rate of over 50%, which has since dropped to around 31%.

“What you are going to see now are people who got infected about seven or eight days ago and are coming to hospitals,” he said, adding that these patients need a variety of medications and support, including oxygen.

Courts enter

On Wednesday the Supreme Court of India ordered the central government to do so Present a comprehensive plan by Thursday Outline of steps to meet medical oxygen needs for hospitals in Delhi, including sources of supply and transportation regulations. The country’s supreme court also stayed Contempt from the High Court of Delhi on May 4th to the central government for failing to comply with its order to provide adequate oxygen to hospitals in Delhi.

Delhi Supreme Court justices Vipin Sanghi and Rekha Palli found on Tuesday that hospitals and nursing homes had to reduce the number of beds on offer because they were unable to service their existing capacities due to a lack of medical oxygen .

The National Capital Territory of Delhi, which includes the Indian capital New Delhi, is one of several areas that has seen rapid growth in some cases, forcing the local government to tighten restrictions in order to try to break the chain of transmission.

Logistics problem

India has adequate oxygen, but the main problem, according to Siddharth Jain, director of Inox Air Products, one of India’s leading manufacturers of industrial and medical gases, is logistics.

Jain told CNBC’s Street Signs Asia on Wednesday that the country’s oxygen manufacturers have increased production by more than 30% in the past few weeks. He said that over 9,000 tons of oxygen are available in India per day, while the consumption of medical oxygen is slightly higher than 7,500 tons.

“There is certainly a lot of oxygen. It’s just that we have to get the logistics right. It’s available in parts of India that are far from the parts of the consumption,” Jain said. He explained that most of India’s oxygen production takes place in the western and eastern states, some of which are relatively less densely populated and therefore do not require as much oxygen.

“Delhi is certainly the capital of India, but oxygen needs are nationwide,” he said, pointing out that it is difficult to get oxygen from one part of India to another.

According to Max Healthcare’s Soi, logistics have improved, but a few gaps still need to be closed.

For their part the The Indian government has stepped up efforts to streamline oxygen supplies in the country. Two medical oxygen systems were built in New Delhi within a week and funds were allocated to install 500 such systems across India over the next three months.

Chip scarcity will hit electrical automotive manufacturing

An ES6 electric SUV from Nio Inc. at a battery swap station in a parking lot in Shanghai on March 1, 2021.

Qilai Shen | Bloomberg | Getty Images

BEIJING – Chinese electric car launch Nio said Tuesday a global chip shortage will force it to make fewer cars in the second quarter.

The high demand for electronics amid the coronavirus pandemic and the pressure of US-China trade tensions on the highly specialized semiconductor supply chain have contributed to an increase Chip manufacturing backlog.

Large automakers had to cut production As a result, Nio, based in China, announced such cuts at the latest.

The company had increased production capacity to 10,000 vehicles per month in February, an increase from 7,500 previously, founder William Li said in a quarterly earnings call on Tuesday. However, a shortage of chips and batteries means Nio will have to fall back to the 7,500 level in the second quarter, he said.

Nio predicts strong deliveries

Despite competition from Tesla, Nio stayed ahead of its start-up competitors in vehicle sales.

The company delivered 7,225 vehicles in January and 5,578 vehicles in February during the weeklong New Year holiday. With a forecast of 20,000 to 25,000 deliveries in the first quarter, Nio assumes that deliveries in March will increase to at least 7,197 vehicles.

In contrast, Xpeng said Tuesday it delivered 2,223 electric cars in the last month while Li car expect it will deliver fewer than 4,000 cars per month in the first quarter.

Nio founder Li said pre-orders for the et7 sedan unveiled in January have outperformed those of the company’s other models but refused to share certain numbers. The et7 is Nio’s first non-SUV consumer car and is scheduled to begin deliveries next year.

Li added the company had stayed on track plans to enter Europe later this year.

Nio’s shares, listed on the New York Stock Exchange, fell 4% in trading for extended periods after a fourth quarter earnings loss of 0.93 yuan (14 cents) per share was reported. That is more than the analysts’ forecast loss of 0.39 yuan per share, according to FactSet.

The company attributed a quarterly increase in net losses of nearly 33% to 1.39 billion yuan ($ 212.8 million) for the final three months of 2020, mainly due to the depreciation of the US dollar.

The Nio share rose more than 1,000% in the past year after the difficult start received approximately $ 1 billion in capital injection from government-backed investors and traders who have piled into the stock alongside a surge in Tesla shares.

For the future, Nio expects total sales of 7.38 billion yuan to 7.56 billion yuan in the first quarter after 6.64 billion yuan in the fourth quarter.

Don’t Waste Your Cash: Laptop Chip Scarcity

Posted: Feb 17, 2021 / 10:41 PM EST
Updated: February 17, 2021 / 10:41 PM EST

Remember how Sony PlayStations weren’t to be found during the holidays but should be plentiful by now?

That did not happen, and the main problem causing these bottlenecks is now other bottlenecks as well.

Can’t find a PS5 or new Xbox? Sony now blames a massive global chip shortage.

No, not casino or potato chips, but computer chips.

According to CNBC, a shortage of semiconductor chips is slowing the production of all types of electronics, even automobiles.

GM, Ford, Honda and Fiat Chrysler are reported to be slowing production of some models because they cannot get computer chips for their onboard displays and other electronics.

Of the major automakers, only Toyota says it has not yet been affected as it has stocked up on chips in advance.

According to CNBC, an unexpected surge in electronics sales last summer caused its suppliers to run out. Consumers bought laptops and desktops, new phones, big screen televisions and game consoles.

Nobody foresaw the pandemic, but this really stinks.

Sony says it won’t be able to ramp up PlayStation production until the chip shortage subsides, and the hunt continues.

Cramer calls on U.S. to fund vegetation to handle chip scarcity, unemployment

CNBC’s Jim Cramer said Wednesday the United States should fund the development of a chip maker to address both the high unemployment rate in the country and a chip shortage that affects American businesses.

More and more companies, including automakers, like ford and General Motorsrecently raised the alarm about global supply of components, which led them to cut back on production of their own products.

Meanwhile, the US job market is struggling to get out of the coronavirus-induced recession with an unemployment rate of 6.3%.

“We need more chips and we need more jobs,” said Cramer on “Bad money. “” Why not kill two birds with one stone? It is time for our government to invest in building the largest and best complex of semiconductor foundries in the world. “

Automobiles are getting more technological, which requires silicon chips for things like power steering, brake sensors, and entertainment devices. The Supply bottlenecks forced GM and Ford to close factories, delaying new car deliveries. GM warned the disruption could affect its 2021 goals.

The demand for chips, which are also used in products such as televisions, game consoles, and computers, increased during the pandemic as Americans switched to remote work and study environments. Cramer also blamed globalization, which enabled companies to outsource manufacturing to giants like them Taiwan Semiconductor and Samsung Electronics in Asia.

The more connected cars become, the more semiconductors they will need.

“Believe me, you will hear about this shortage every day because it is devastating all kinds of industries, making us a much less competitive and perhaps even a hostage company. Hostage to a larger chip customer, the PRC. We have to Be one step ahead of that, “said Cramer.

“Our companies cannot get enough chips because there is not enough production in the world, and this shortage of chips affects all types of manufacturing,” he added.

He signaled that he was optimistic about Gina Raimondo, the governor of Rhode Island who was named head of the US Department of Commerce by President Joe Biden. Raimondo is a former venture capitalist who gives her an ideal perspective on the business world, Cramer said.

He also said the low interest rate environment can be a catalyst to fund the federal project with bonds.

“America’s best tech industry, the most intellectual property there is in technology, is in semiconductor capital goods,” said Cramer, referring to companies like Lam Research, KLA Tenor and Applied Materials, which make machines for making chips need.

“Building gigantic semiconductor foundries enables more people to work than any other infrastructure project.”

Disclosure: Cramer’s charitable foundation owns shares in Ford.

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