Aldi sounds alarm on groceries

Aldi has warned suppliers panic buying of essential grocery items such as toilet paper has spread to everyday products.

Panic buying of toilet paper has extended to other grocery staples, leaving some Aldi shelves devoid of everyday products.

The nation’s third-biggest supermarket chain, German discounter Aldi, has warned suppliers in an internal memo that panic buying of essential grocery items has now quickly spread to everyday products and they need to co-operate closely to ensure shoppers aren’t faced with empty shelves.

To bolster its supply chain, Aldi has also decided to provide up-to-date daily sales information to grocery suppliers to help in their own planning and smooth the path from the factory gate to the supermarket ­delivery bay.

Previously this crucial sales data was only available on a weekly basis.

Aldi in the lead-up to the weekend also imposed limits on the sale of toilet rolls at its stores due to spikes in demand caused by the coronavirus, matching recent policies introduced by Woolworths and Coles. Aldi customers were limited to four packs each.

Over the weekend Coles cut its limit to one pack of toilet paper per customer transaction, while Woolworths cut its limit four packs to two.

Aldi has also imposed “bulk purchase guidelines” on key staples such as hygiene products, tinned foods, rice, pasta and long-life milk, allowing for 10 units per customer.

Panic buying has spread throughout Australia’s $100bn grocery sector, with leading chains Woolworths, Coles, Aldi and independent supermarkets supplied by Metcash reporting fearful shoppers stripping shelves of ­essentials such as toilet paper, wipes and sanitisers, a trend that has now spread to food items such as pasta and tinned goods.

Anxiety over the outbreak and spread of COVID-19 has seen consumers stock up on toilet paper, bleach, hand sanitisers and pasta and seen supermarket staff break up fights in the aisles and place limits on purchases.

In a memo to its suppliers, and obtained by The Australian, Aldi managing director of buying Oliver Bongardt warns that the panic buying has now swollen from daily essentials to other supermarket categories.

“As the coronavirus issue continues to develop globally and nationally, our supply chains are significantly challenged, resulting in products not being available to our customers,’’ Mr Bongardt says in the supplier letter.

“ ‘Panic buying’ started with everyday staples but has now extended into many other product categories across our assortment. We acknowledge that the most important focus is the safety of the people working in our respective businesses and this must always be prioritised.”

But the panic buying was now denting Aldi’s commitment to its customers to have products available and on the shelf.

“It is our duty to ensure any customer who walks into our stores can purchase any product from our range. Our teams need to collaborate and do everything possible to fulfil our customers’ expectations by minimising disruption to our supply chain and ensuring stock availability.”

To more tightly bind Aldi with its suppliers and help them make better use of supermarket sales data to inform their own production strategies, the discounter has amended the frequency of its core range point of sales report, which will now be emailed to suppliers daily instead of weekly.

Suppliers such as White King, the maker of a market-leading bleach, and toilet paper manufacturer Sorbent are operating their factories at full capacity to keep up with demand.

Brad Banducci, the chief executive of the nation’s biggest supermarket chain Woolworths, which has also brought in its own purchasing limits, has emailed shoppers over the weekend to ­assure them it has robust supply chains to deal with the spike in demand, but if the panic buying continued it could lead to further buying restrictions.

“We're working very closely with our suppliers to get products on to shelves as quickly as we can. The makers of Kleenex, Sorbent, Quilton and Woolworths’ own range of toilet paper have all increased their production to meet this very unusual demand.

“The makers of Kleenex are now manufacturing 24 hours, seven days a week at their Millicent, SA factory, as are Sorbent in their NSW and Victorian facilities. And the makers of Quilton have tripled their normal production across their factories in Queensland, NSW and WA.”

Mr Banducci said most products were not affected and most stores were not seeing significant shortages. But a run on the supermarkets could force its hand to bring in new buying restrictions.

“We’re constantly monitoring the situation and will do our best to keep all products freely available to everyone. However, if we see new shortages, we may introduce other limits.”