The COVID-19 pandemic has caused unprecedented stresses on food supply chains due to momentous shifts in demand and significant restrictions in the supply value chain and supply. Such strains are well visible when the public is compelled to remain in lockdown conditions. LIRNEasia researched households and retailers for over a period of 14 days during the second wave of the pandemic in Sri Lanka in November 2020, when lockdown measures were imposed in certain areas in Gampaha District. Real time information from the research participants were collected through online platforms such as WhatsApp and Messenger. Our research revealed several bottlenecks of food access experienced by the people living under lockdown condition.
Movement restrictions and high prices are affecting food security
During a lockdown, there is a risk to food security when consumers are unable to access food. World Food Summit in 1996 empathised physical, economic and social barriers of food access. Physical barriers explain logistical dimensions. For instance, even the food is produced in an area, due to limited to or no transport facilities. Lack of information for those who actually need food in another area may not get it. Additionally, food should be affordable and people who need it, should have financial ability to purchase.
The research revealed that at the start of the second wave of lockdown, consumers’ demand increased for rice, grain-based products, sugar, snacks and milk powder; presumably because people were focusing on products with longer shelf life. Panic buying contributed to a significant rise in food prices resulting in some store shelves temporarily being emptied. Fresh vegetable prices went up since the Manning market was closed and grocery shop owners had to buy fresh vegetable from other accessible markets.
Movement restrictions disrupted the food distribution to local outlets, which may have resulted in a temporary rise in food prices. Getting travel permits to source, sell and deliver food items was difficult for retail shop owners since the procedure to obtain travel permits was not clearly defined. Though the World Bank and ICTA have initiated a digital platform to process travel permit requests, thereby making the process faster, it is yet to be implemented.
Grocery shops thrived during the first lockdown, while supermarkets faltered
Those under lockdown conditions bought food from a variety of sources, including supermarkets, nearby grocery shops, mobile vendors that came to their neighbourhoods, and online platforms. During the first lockdown (March-June 2020) grocery shops competitively provided satisfactory service to their customers unlike the supermarkets who were unprepared. Grocery shop owners capitalised on the social relations they had with the consumers in the locality and essential items were delivered to households. Grocery shops quickly adapted to the situation by taking food orders via phone calls and WhatsApp. Supermarket chains were unable to cope with online demand, and those who purchased products from supermarkets through online platforms mentioned severe delays in delivery and lack of products to purchase online.
Digital response from supermarket chains led to reversal of fates by the second lockdown
According to grocery shop owners and consumers, by the time the second lockdown was implemented, the supermarkets had adapted to the situation by upgrading their online ordering procedures and distribution strategies. Supermarkets introduced online-queues to order products and enhanced their inventory management, where the upgraded facilities served the consumer demand better. Online delivery platforms such as PickMe and Uber partnered with supermarkets ensuring timely delivery. However, the local grocery stores could not be on par with the supermarkets in terms of digital adaptation and consequently their service to consumers deteriorated. According to the interviews conducted with grocery shop owners, their businesses were not profitable during the second wave. A reason highlighted was that their customers moving to upgraded, more efficient online ordering systems of the supermarkets, and supplier focus shifting away from the groceries and towards supermarkets.
“The pandemic is not going to end in the near future, so we have to be prepared for digital adaptation. We can adopted the system of online ordering and delivering. But we need to find good suppliers such as wholesale shops or Sathosa. So we can look after customers in our village, that would be enough business for us” a grocery shop owner mentioned.
Changing the way of grocery shops to enhance food access
Digitalisation, or the lack thereof, has been a longstanding challenge for smallholders. A study conducted by LIRNEasia (in 2019 before the COVID pandemic) revealed that Small and Medium Entrepreneurs (SMEs) do not see the need to be connected, despite evidence that connected SMEs earn 2.8 times the revenue, and 2 times the profit of their unconnected counterparts. Consequently, only 40% of SMEs used the internet or social media. Evidence from our latest research indicates that this has been a challenge for small grocery shop owners, leading to them being left behind in times of crisis.
In 2019, only 4% of SMEs used mobile money services. The COVID 19 lockdowns created a clear need for SMEs to get connected and use digital platforms to provide their services. Digital payment services play an important role in the interactions during the pandemic. However digital initiatives for these corner shops should not be limited to payment platforms. Digitalized inventory management could ensure sustainable product supply. Marketing campaigns could be digitalised to reach a wider customer base. Moreover, usable consumer insights could be generated through digital platforms. At the end, consumer relations of the shop owners would be enhanced, making the businesses resilient during lockdowns. In China, an Ali Baba initiative called Ling Shou Tong (retail integrated) offered a suite of new services to digitalize classic Mom and Pop shops. The initiative was to digitalize the entire retail value chain for the benefit of both merchant and consumer.
Grocery shop digitalization will not only minimize the barriers in the food supply chain but will prevent the spread of pandemic by minimizing human interactions. In the long term, digitalizing small retailers could reduce the negative impacts on the economy and will improve food access.