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How the Supply Chain Broke Due to the Pandemic

Posted on January 27 2022

Restaurants across the country are busier than ever, as consumers resume everyday activities including indoor dining. While restaurants are grateful for the business, the supply chain is struggling to catch up with the demand.

Since the start of 2021, the restaurant industry has experienced a massive swing back toward recovery. As of July 1, 2021 - 325,164 restaurants were open for dine-in services, according to Datassential, an increase of more than 105,000 since March. That increase in demand is certainly a good sign for the overall foodservice industry, and all the businesses that support it, but the sudden rise in activity has strained the supply chain, leading to longer lead times, higher prices and more uncertainty for owners and operators looking to upgrade equipment or open a new restaurant.

Unfortunately, our industry is not immune to manufacturing and shipping delays. Many of the components to foodservice equipment are impacted by the low supply and high material cost. As a result, manufacturers are once again increasing their pricing to offset their manufacturing costs. The supply shortage is also causing extended lead times of equipment across the entire industry.

Dealers across the country are seeing shortages of commercial kitchen equipment regardless of the category. All types of restaurant equipment are seeing unprecedented backorders, shipping delays, and unavailability. Items that used to ship in days now have months-long lead times. For example, lead times for walk-in freezers and refrigerators are now between 8 and 10 weeks, while underbar equipment can take as long as 25 weeks to deliver. The impact is wide-ranging, with many items, such as fryers and deli cases, now seeing lead times of 10 weeks or more.

Price Increases during supply chain shortages: Many raw materials, including the stainless steel and aluminum commonly found in kitchen equipment, are near all-time price highs while others are suffering from shortages. Due to these shortages and delays, raw material costs are rising to meet demand. These challenges are affecting all manufacturing processes and industries, and this issue does not look to be going away anytime in soon.

 

The labor shortage many factories are experiencing is driving even more equipment shortages. Although overall restaurant sales have nearly recovered to pre-pandemic levels, employment at bars and restaurants was still down in June 2021 compared to June 2019, according to data from the Bureau of Labor Statistics.

The need to fulfill pre-pandemic sales volumes with a reduced back-of-the-house staff has caused more operators to seek out labor-saving equipment. That has made items such as heated holding cabinets more desirable right now because they can help operators manage the flow and timing of service with fewer employees.

Price Increases: Drastic price increases are another set of challenges facing the foodservice industry. One of the biggest challenges is inflation and the need transfer it to the end-user. Price increases and surcharges all take time to implement, leaving the manufacturer or dealer in a tough position. The current inflation is affecting all segments at once: freight, lumber for pallets, labor and raw materials. Stainless steel alone has increased in price by 20 percent, since mid-2020 according to Foodservice Equipment Distributors Association.

Note: We will always keep our customers updated on which brands are getting price increases and when so that we can help you get the best price possible. 

Supply Chain Issues During Pandemic: With lead times and pricing so uncertain right now, Superior Equipment has rediscovered the value of keeping more inventory in our warehouse. We made the commitment to buy cooking equipment, refrigeration and stainless steel shelving in large quantities just to have the inventory ready to ship to our customers.

We are here for you! We strive to ensure that each order is fulfilled as quickly as possible.

Please to reach out to a product specialist for any help. The availability and lead times for equipment can change by the minute, so please confirm with our product specialists that any lead time is the most up-to-date information.

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