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Wendy's Locations Run Out Of Beef As COVID-19 Forces Meatpacking Plant Closures

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Wendy's Locations Run Out Of Beef As COVID-19 Forces Meatpacking Plant Closures

More than 1,000 Wendy’s Co. (NASDAQ: WEN) locations were out of hamburgers Monday, according to The New York Times

Disruptions caused by the coronavirus pandemic have caused the closure of a dozen meatpacking plants in the U.S., and the impact is being felt in the meat supply chain, the Times reported Tuesday.

More Than 1K Wendy's Locations Run Out Of Beef, Stephens Says

Supermarkets such as Kroger Co. (NYSE: KR) as well as Wegmans and Hy-Vee are experiencing shortages, the Times report said. 

About one-fifth of Wendy's locations — or 1,043 restaurants — were out of beef and burgers Monday, according to an analysis by Stephens, the Times said.

A Wendy’s spokesperson told the Times that "some of our menu items may be temporarily limited at some restaurants in this current environment.” 

Meat shortages are likely to be temporary and are being unevenly experienced. McDonald’s Corp. (NYSE: MCD) has not yet felt any shortages, the Times reported, but Shake Shack Inc. (NYSE: SHAK) executives have warned of beef price increases.

Cattle Numbers Plunge From Average 

President Donald Trump issued an executive order in April mandating that meatpacking plants remain open.

In response, the Teamsters union demanded enforcement of worker protections and increased testing for food supply chain workers.

The number of cattle slaughtered per week has fallen bellow 500,000, a 35% decrease from average beef production levels, Cassandra Fish, a meat industry analyst, told The Times.

Fish said that retailers are experiencing stock shortages that they have not publicly acknowledged, and added that the shortages are due to both supply issues and consumer hoarding.

Stores have responded by placing caps on customer purchases. Kroger is limiting the amount consumers can buy, while Costco Wholesale Corporation (NASDAQ: COST) has placed a three-product limit on fresh beef, poultry and pork.

WEN Price Action

Wendy’s shares were down 2.44% at $18.81 at the close Tuesday. The stock lost another 0.85% to $18.65 in the after-hours session. 

 

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