Business Hub: Supermarket boss Chris Quinn on keeping up with demand, Foodstuffs’ plan B to keep staples on the shelves

The boss of one of New Zealand’s largest employers – and what might be the country’s busiest business right now – says he hasn’t slept for more than five hours a day since early 2020.

The pandemic has kept businesses on their toes, and none more so than the supermarkets. And while many businesses have been grappling with trade falling off a cliff, Foodstuffs and other supermarkets have been facing a problem at the other end of the spectrum: keeping up with soaring demand.

And that has been one of the biggest issues keeping Foodstuffs North Island chief executive Chris Quinn awake at night. That, and finding answers for the co-operative’s 500 or so business leaders during daily online meetings during the worst of the pandemic.

However, the nature of Quinn’s problems is changing fast, as Omicron case numbers soar and the prospect of the supermarket operator having to implement its contingency plans becomes more likely.

Auckland-based Quinn answers the phone straight away when I call. He is talkative and you can tell he is used to dishing out answers. Even if he hasn’t exactly answered the question, a lengthy reply has been given. He’s a good talker, as you have to be when leading a business of 24,000 people.

The Food and Grocery Council has grave concerns about the country’s grocery supply chain, as the chances grow of critical workers falling ill with the Omicron coronavirus variant. The industry association fears some groceries may be hard to come by and shelves of common staples could be left empty, like the supply issues faced by their counterparts across the Tasman.

Quinn is realistic that this is a possibility, but hopes it doesn’t come to that. He says Foodstuffs, and New Zealand as a whole, has had the advantage of being better prepared, having been in the privileged – or unnerving – position of watching Omicron take hold overseas.

Foodstuffs’ modelling shows that in a worst-case scenario, up to 30 per cent of its workforce could be affected by the virus and out of action in the months ahead.

“We hope to never get above 10 [per cent], but you’ve got to have a plan because you can’t get caught out,” the St Heliers local tells the Herald.

Thirty per cent of 24,000 staff falling sick is one potential issue; another is that about 1000 of those workers make up the supermarket’s critical back-end operations, responsible for distribution, dispatch and logistics to get stock onto shelves.

“I look back to last year, when Delta hit in August, that first four to six months was pretty rough, but we got through that. At the highest point we had 1100 people isolating and we didn’t close a single store for an hour, we just found different ways to keep going,” says Quinn.

If large numbers of staff are unable to work, the operator of Pak’nSave, New World, Four Square and Gilmours will pull its office staff into the warehouse. It has a training plan in place if that need eventuates.

It would also have to ration and prioritise which items to put on the shelves – out ofnecessity, says Quinn.

“In those times it matters less that we can get every brand and it might mean we have a couple of [options] in every key category; streamline until we got through.

“We do multi-skill people inside the operation as much as we can and cross-skill people in stores,” he says. “We will get people to help as much as they can. You’re never going to get the same level of productivity because they are not expert at that job but you might be able to keep the basics going.”

Foodstuffs has been conducting cross-skill training in stores and its back-end operations. It has also been doing Covid surveillance testing among its workforce since October, testing staff twice a week under the red Covid setting and once a week under orange. It is looking at potentially increasing testing to three times a week as Omicron spreads.

To keep staff “healthily available for work”, as Quinn puts it, the 330-business co-operative has adopted strict mask mandates and has kept teams as separated as possible to ensure any potential exposure can be managed with the least possible disruption.

“This period is going to be challenging. I don’t want to pretend nothing will go wrong. But what I will say is we’ll go back to the basics. We’re talking to our suppliers and encouraging everyone to have a plan to keep their teams safe and healthily available for work.”

In an effort to avoid food shortages, Foodstuffs has also been “steadily building up its stock” in the hope of avoiding being caught out as delays continue to lengthen shipping times and disrupt the global supply chain.

Since October it has added almost 30 per cent to the stock it holds in its warehouses, mostly items with a long shelf life such as tinned products.

Quinn admits the months ahead are likely to be the most challenging yet for the supermarkets and their supply chains. However, he says, close contact exemptions the Government has committed to, alongside the use of daily rapid antigen tests (RATs), will be critical to ensuring operations continue with as little disruption as possible.

Foodstuffs has also committed to supplying RATs to around 250 local businesses at cost price, with the tests expected to arrive early next month. It hopes to be able to sell the tests to the public once it gets clearance from the Ministry of Health.

“We’ve had two years of dealing with unbelievable and unplanned demand,” says Quinn. “We’ve had two years of keeping people safe from Covid and we’ve had the chance to see other countries in the world go through the Omicron phase of Covid.

“I’d never be naive enough to say ‘we’re going to be OK’. This is going to be hard, but we’ve done everything we can think of to get ready.”

Quinn has been working in food retailing for six years. Before that he spent most of his career in IT and telecommunications.

He worked for Telecom (now Spark) for 24 years. Before that, and after studying accounting and law at Victoria University, he began working at manufacturing company ICI and technology company MyTel, before starting with Telecom.

At Telecom, which became Spark in 2014, Quinn headed a wide range of divisions, including running sales teams and customer service operations, and spent a lot of his time building the digital business.

In his last four years with the company he was running the retail division, and by the time he finished in 2015, had worked as acting CEO just before Simon Moutter took the reins.

Foodstuffs wasn’t entirely new to him: his uncle and aunt owned a New World in Warkworth, where he used to work during his summer holidays at university and school. This year the Foodstuffs North Island co-operative turns 100 years old.

Quinn says Foodstuffs would not have been able to deal with pandemic disruption without strong technology systems.

Lockdowns and Covid have encouraged more people to do their grocery shopping online. At present, about 5 per cent of Foodstuffs customers shop online versus in store.

Aside from remaining focused on how Foodstuffs can keep its team safe for work, and its stock levels healthy to minimise any supply chain disruption, Quinn is also focused on keeping retail prices stable.

He acknowledges that the grocery market has seen its fair share of inflation, with increasing prices passed on to consumers as suppliers and manufacturers face huge cost pressures. But, he says, a renewed focus on efficiency to keep costs down is taking up a lot of his time right now.

Stats NZ figures show annual food prices recently increased by the most in more than a decade, up 5.9 per cent from January 2021 to January 2022, while the wider inflation rate has hit a 30-year high.

Whatever happens to prices, Quinn is quick to offer reassurance that New Zealand will never run out of food. He says some brands may not be available in the months ahead, but there will always be an alternative for the same item.

New Zealand, he says, makes products in almost every grocery category and ultimately manufactures more food than the country can consume.

The Commerce Commission is currently undertaking a market study, looking at competition – or lack of – in the grocery sector. The consumer watchdog is convinced the $22 billion sector “is not working well for consumers”.

One of the options being explored is the forced sale of supermarket’s wholesale businesses or some sites to boost competition.

The Commission will consider the Government’s role in facilitating the entry of new players into the market and will make a final report to the government on March 8.

For the most part, demand for groceries and supermarket sales have been at all-time highs in the past two years. Demand has doubled for most stores – usually in the weeks of the strictest alert level restrictions, though regional stores in some tourist towns have been hit by falling trade.

The hospitality segment at Foodstuffs’ food service business Gilmours has been challenged by Covid-19, but overall revenue growth for Foodstuffs North Island have grown by 5-6 per cent year-on-year over the past couple of years.

The co-operative does not disclose operating revenue or net profit figures.

Over the next 12 months Foodstuffs North Island will open 12 new stores, refurbish 23 and undertake 15 seismic projects to meet updated safety regulations.

The father of two adult children, aged 25 and 22, who has arguably the coolest voicemail in the country – a personalised “Stickman” recording by comedian Paul Ego, who voices the Pak’nSave adverts- spends about a third of his time in stores.

For Quinn, the past two years have been hectic, to say the least. Most days he has lost sleep over the challenges facing the business. According to his Oura Smart Sleep Ring, he is not doing a very good job of resting, getting about five hours sleep per night. Since the pandemic began, he has had only a one-week break – in the Cook Islands last year.

“Everybody has had a tough time for the last two or three years, but for us it has been instant always-on pressure,” he says.

“Any time level 4 was accorded we were at Christmas trading levels.”

Quinn has always thought of communication as key, but this has been even more true in times of crisis: “You can never over-communicate,” he says.

During the heat of the pandemic under alert level 4 restrictions, Foodstuffs would have between 500 to 600 leaders on a Teams phone call every day at 9am. Those meetings are now held just once a week.

Quinn has 12 direct reports and says his role as chief executive is mostly about having good judgment – governing the organisation as opposed to managing it.

The challenges faced over the past two years are mild compared to what likely lies ahead, says Quinn. His hope is that by the end of 2022, Foodstuffs has come through and is “out of the system impacts that come with Covid”.

“We’re the most prepared than we have ever been, we have the strongest protocols and actions in place than we’ve ever had, but the challenge of this is the greatest [we have experienced yet],” he says.

“New Zealanders will see impact [from Omicron] but I don’t think we’ll see the crisis in supply chain that has been seen elsewhere. If customers can work with us to just shop in their normal pattern and normal volumes, we have our best chance at doing this.”

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