Dill Pickle Food Co-Op Manager on ‘outages’ in grocery items amid supply chain issues

I’Talia McCarthy, The Dill Pickle Food Co-Op Manager, joins Yahoo Finance to discuss struggles in hiring, panic buying, and challenges amid supply chain issues.

Video transcript

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- Welcome back. Well, if you've taken a trip to your local grocery store, you've noticed some items may be hard to find. As a result, some companies are taking measures to avoid running out of products, and consumers are starting to feel the pinch. Here to discuss the headwinds she's facing in her Chicago business is I'talia McCarthy, the Dill Pickle Food Co-op manager. And joining us-- Yahoo Finance's Dani Romero. Thanks, everyone, for being here.

And if you could just, I'talia, explain what your company is, and explain what is it co-op, for people who don't know.

I'TALIA MCCARTHY: Yeah, so the Dill Pickle Food Co-op is a community-owned grocery store. Co-ops have a very different business model from other businesses, such as Mariano's or Cermak, here in Chicago. We're owned by the people who shop here. So we have over 4,000 owners that are part of the Logan Square community.

And the reason why we're a little bit different is we prioritize community as well as local products here within the Chicago area, as well as Minneapolis and Indiana. Kind of our definition of local is within 300 miles of where our store is. We're democratically ran. So I report to nine board members that are elected by our communities. So they are people who just kind of shop at the store. They can be teachers, business owners, nurses, activists, anything like that. And they kind of help run the store, so that's kind of what co-ops are all about.

DANI ROMERO: And what are the items that you have been noticing short of? And are you are you guys trying to stockpile and navigate that in some way?

I'TALIA MCCARTHY: Yeah, so we've definitely been seeing lots of outages in basic pantry items, such as beans, rice, grains, things such as that. And we've also seen outages in even our meat department, as far as poultry and beef go. It's kind of been sporadic everywhere, unfortunately, and specifically now, as we see COVID cases starting to rise again. But yeah, we've definitely just been seeing a huge decline in us being able to receive our orders. Many of our distribution centers are seeing outages, due to people calling out sick and not being able to hire enough truck drivers and people to work the warehouses to actually get the food to the stores that they're supplying to.

ALEXIS CHRISTOFORUS: So, I'talia, I'm curious if you're seeing any kind of panic buying. I mean, does it feel a little different when people come in to pick up their food than previous months?

I'TALIA MCCARTHY: I definitely see a little bit of panic buying, but it's nowhere near what we saw at the beginning of the pandemic in March of 2020. I do see a couple of buyers stocking up on pantry items, as well as household items, such as toilet paper, Kleenex, and things like that. I've also seen other stores put limits on the amount of items customers can purchase in specific categories. We're not quite there yet, but if we do see panic buying, we will start setting those limits for our customers in the store.

DANI ROMERO: Yeah, and talk to me about those limits. Have you seen people start to hoard food? And how are you going to-- what's the plan on how you're going to navigate that, if it does come to that point?

I'TALIA MCCARTHY: Yeah, I haven't seen anybody hoard too much food quite yet. But if it does come to that point, we will definitely set limits. And usually what we do is we'll put signs near that specific item and say, please only take two. And then, also, our cashiers are our people holding our customers accountable to making sure that they're only grabbing that many items and leaving enough for the rest of the community and customer base to be able to purchase.

We'll also probably put out a bunch of communications. We have a communication newsletter that we send out twice a month that goes out to our customers and our owners asking them to respect our rules at the store and help with making sure that panic buying doesn't occur again.

- And I'talia, tell me about your own labor situation. Are you staffed up, or are you having difficulty with that respect? What are the biggest challenges, going into the holidays? And also, are you having to raise prices by a big margin to stop them cutting into your profits?

I'TALIA MCCARTHY: Yeah, so actually, we've been struggling a lot with hiring. Hiring has been not as easy as it once used to be. We do offer a wage a little bit above the minimum wage right now, but it doesn't seem to be appealing enough to get a big flood of applicants.

Currently, we're probably missing about five or six positions within the store right now that we're trying to fill and we've been having a hard time filling. Not very many applicants, and when people do apply and we set up interviews, a lot of them aren't showing up to the interviews or telling us that they already found another job. So we've definitely had a difficulty with that. And not only are we struggling with not having enough bodies in the store, we have a lot of employees getting sick and calling out sick, which puts us in even harder position as an organization.

As far as pricing goes and working with our vendors, we've actually received a lot of notices from specific firms and companies within the Logan Square area, sending us notices letting us know that they're raising their prices by 30%. When they raise their prices and our cost goes up, we also have to, in turn, raise our prices for our customers. So I think the key for us is making sure that we stay on top of that, and also communicating it to our owner base that that's what's going on right now. But yeah, prices are definitely rising right now.

DANI ROMERO: And one last thing, back on the distributors-- what are they telling you, in the sense of when these products will become more available? Have they mentioned anything about that?

I'TALIA MCCARTHY: Yeah, so I actually got weekly communications from one of our biggest distributors, UNFI. And sometimes I even get daily communications from them. Right now, we're going through this thing called order smoothing, and that means that we'll place our order and they'll only fulfill about-- I mean, the lowest they filled was 29%. So even though we needed all of that order, that we only got 29% of that order come into the store. The highest it has been 89%.

And they continue to communicate that they're working on it, that they're trying to get more people hired, letting us know whether deliveries will be canceled. So the communication has been really, really good, but there hasn't really been any bright light to look forward to so far. So we're kind of just trucking along and trying to look for different avenues and ways to source other products, besides our main distributors. But it seems as though all of the other smaller producers and local producers are also struggling with getting product out to people, too.

- It is definitely shaping up to be a challenging holiday season, so good luck to you with that. I'talia McCarthy, the Dill Pickle Food Co-op manager, thank you so much for your time today.