Big buyers including Walmart and Sysco are starting to fine suppliers over late food deliveries or incomplete orders, as tight labor conditions, supply constraints and higher freight costs course through distribution channels, the Wall Street Journal reported.
The paper said that penalties revive programs that were suspended during the pandemic, when sudden upheaval in consumer buying patterns triggered widespread supply shortages. Retailers say they are trying to keep shelves stocked in a rebounding U.S. economy, but suppliers like Pillsbury owner Hometown Food say their supply chains are still challenged by soaring raw materials costs and tight transportation capacity.
The higher costs are filtering through to consumers. A new reading on inflation at the consumer level will arrive this week along with an update on wholesale inflation levels.