At Redner’s Markets, ‘It is all hands on deck.’

When the governor encouraged Pennsylvanians to stay at home to help stop the spread of the coronavirus, people swiftly headed to area grocery stores to stock up.

Faced with a two week quarantine at home, shoppers hoarded toilet paper, eggs, bread and meat. While a snowstorm might cause some panic-buying, this was on another level.

Redner’s Markets, a Pennsylvania-based supermarket chain, got four times the amount of normal traffic last week. -PHOTO/SUBMITTED

I stopped at my local Redner’s Market for chicken, only to find the chicken aisle bare. Cleaned out. Not a breast. Not a thigh. Not a chicken wing to be found.

“It is across all stores,” said Eric White, director of marketing for Reading-based Redner’s Markets, which is an independent chain of supermarkets with locations throughout Pennsylvania.  “We are experiencing challenges with distribution and supply.”

While the amount of food available was adequate for a normal week, when customers flooded stores last week the regular supply was quickly diminished. To stop the hoarding, Redner’s is allowing store managers to set limits on the number of items customers can buy of certain foods, like toilet paper or meat.

“We are getting regular shipments of beef, baking items, and bread, but we can’t get it on the shelves fast enough,” said White. “We are getting four times the normal buying traffic, and replenishing product and trying to get ahead is challenging.”

Under normal operating conditions there would be enough food on the shelves, but when customers over-buy items, it drains inventory and warehouses and supermarkets have to catch up. There is no food shortage, it is that the customers are over-buying.

“It’s not at the level of last week now,” White said. “It is slowing down. And we are putting limits in place. It’s all hands on deck and we are doing our best to get the food on the shelves.”

White also said that due to the massive buy out of certain items like eggs, there have been commodity price shifts. “The price of eggs jumped over 200 percent,” he said.

“We understand the burdens placed on the stores,” White added. “We understand the guests’ fears.”

Redner’s is reducing store hours and closing earlier every day to restock items and clean and sanitize the store. The chain is also giving all store employees $2-an-hour raises until the crisis passes.

“All praise goes to our store folks,” White said. “They have been positive and up for the challenge. They are going about their business. We could not be more proud.”

Report: Strong demand for cold storage poses challenges for developers

As grocery delivery gains popularity, so too does the need for facilities to store these items.

In the valley, these facilities do exist. However, there’s not enough to meet the demand.

United States Cold Storage recently opened a freezer warehouse built by Primus Builders in Richland Township near Quakertown. (Submitted) –

A new report by real estate firm CBRE said developers and investors are grappling with the specialized requirements needed to build new cold storage warehouses.

“It’s tough to build in the valley close to interstates,” said William Wolf, executive vice president of CBRE at its Upper Macungie Township office. “It’s just a general condition to what’s happening in the valley.”

Developers can build them from the ground up, but they are costly. The other alternative is to take an existing warehouse and convert it to cold storage or create a hybrid part dry/part cold storage warehouse, he added.

As home delivery grows for groceries, prepared meals and pharmaceutical/medical products, Wolf said he sees the risk of the shortage of temperature-controlled space to meet the growing demands of an emerging market.

“They are just going to look at other locations,” Wolf said. “As home delivery starts to grow, you aren’t going to be able to handle it out of the back of supermarkets.”

However, this will create opportunities for developers willing to address the looming necessity, he added.

Cold storage facilities do exist in Bethlehem, Fogelsville and other areas of the valley, but what makes them difficult to build is the higher construction cost, longer completion times, and specialized equipment needed for temperature control.

The report said these storage facilities cost on average two to three times as much as traditional dry warehouses, partly because of the need for insulated metal paneling, mechanical equipment, refrigeration equipment, and rooftop equipment, subfloor heating and other elements.

First, construction of these cold storage warehouses can often take four to five months longer than traditional warehouses.

Second, cold storage warehouses need much taller ceilings, often 40 to 60 feet, as compared to the 34 to 36 feet required for traditional warehouses.

Third, these facilities need to maintain specific temperatures depending on the inventory, which is why they need significantly more equipment.

The higher ceiling heights these facilities require could pose ordinance issues with municipalities, Wolf added.

However, by going up as opposed to out, these facilities can store more products in a smaller footprint.

According to the report, CBRE sees three major shifts defining the rise in development and construction of cold storage facilities in the coming years.

First, developers will need to construct more facilities on speculation, or build facilities without tenants signed up. Spec building is a rarity in cold storage and boosting it might require additional developers and specialized contractors to enter the market, the report said.

Second, small markets will likely see more cold storage construction. Most construction has taken place in large markets for decades, but rising land and construction costs are likely to push developers and end users to smaller nearby markets.

Third, the report said automation would become more common, which would allow big retailers and other users to streamline processes and improve productivity.

Wolf said the facilities would still need many workers who are skilled in mechanical labor to make sure all the equipment is operating properly.

“The industry has to change to adapt to it,” Wolf said.

A number of developers will take on these facilities, Wolf said, noting that they generate higher rents. Furthermore, more investors will invest in cold storage.

“Right now it’s very difficult to find space for cold storage in the valley and it has been for the past few years,” Wolf said. “Traditionally, it’s been build-to-suit. But now I think you have some developers who will build these on spec but it would be interesting to see what will happen. I think we are in the early stages of this demand cycle for cold storage.”