TOPLINE
Fast-food chain Wendy’s reported Wednesday that same-store sales are increasing, after plunging in March and the first half of April due to the coronavirus pandemic, but limited meat availability could continue to plague the company—and grocery shoppers—as plant shutdowns and absent workers constrain the country’s supply.
The impact of meat plant shutdowns has hit fast food and grocery stores differently.
Photo by Robert Nickelsberg/Getty Images
KEY FACTS
Wendy’s shares rose 6% in Wednesday premarket trading after issuing its earnings report for the quarter.
Two days prior, on Monday, over 1,000 of Wendy’s restaurants (about one-fifth) were completely out of beef products, including hamburgers, the New York Times reported.
Some Wendy’s customers posted photos of signs saying stores were out of beef on social media.
Dozens of meat plants have shut down across the country as infections spiked among their workers, leading President Trump to declare the plants “critical infrastructure” and sign an executive order to keep them open.
Grocery shoppers are also impacted, as stores like Kroger’s and Costco limit purchases of meat.
Despite Trump’s order, Bloomberg reported Tuesday that the risk of shortages and higher prices were possible, as absenteeism among plant workers has increased.
Big number
Almost 5,000. That’s how many meat plant workers have tested positive for COVID-19, out of approximately 130,000 nationwide, according to a Centers for Disease Control report. 20 have died.
Crucial quote
“There is not one person in the meat industry who was not caught off guard,” said meat industry analyst Cassandra Fish of the nation’s constrained supply to the Times.
Key background
Meat plants like Tyson Fresh Foods and Smithfield Foods are working to continue operations, partially reopening after Trump issued his executive order. Tyson said Monday that its hog production is 50% down, but did not offer additional context. The impact of meat plant shutdowns has hit fast food and grocery stores differently. McDonald’s said Tuesday it has not experienced any beef shortages, but Shake Shack warned investors that it could be facing price increases in that category. According to the Times, grocery executives say any shortages are temporary and that most meat products are available—but some could continue to be scarce. There is no shortage, however, of frozen beef in cold storage, according to analysts.
Tangent
Alternative meat sales, like the Impossible Burger, are (perhaps unsurprisingly) soaring during the pandemic.
Further reading
Wendy’s shares jump after company reports US same-store sales picking up as customers return (CNBC)
A Wendy’s With No Burgers as Meat Production Is Hit (New York Times)
Trump Says Meat Plants Are ‘Critical Infrastructure,’ Signs Executive Order To Keep Them Open (Forbes)
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