US workers are returning to tough food-warehouse jobs after COVID lull

One of the largest food suppliers to American restaurants and hotels said workers are finally coming back into the labor force after the pandemic.

US Foods is fully staffed and no longer having trouble attracting and retaining workers, CEO Dave Flitman said. Years after COVID-19 locked down cities from New York to Los Angeles, government aid is running out and people are finally taking up some of the toughest jobs such as those in warehouses and driving trucks, he said in an interview at the company's headquarters in Rosemont, Illinois. 

"We're fully staffed in all of our operations, and the majority of the labor challenges are behind us," Flitman said on Wednesday after the company's investor day. "We're seeing people more eager to engage in those physically demanding types of work."

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Millions of Americans dropped out of the workforce during the pandemic. While many fell ill, others delayed returning in part due to government aid. But real disposable incomes have risen only modestly over the past year, and shoppers have mostly exhausted extra stockpiles of cash from the pandemic.

Hiring in the U.S. has recently cooled. Manufacturing firms cut 20,000 jobs last month — the most since July — while professional and business service companies also shed staff, according to ADP. Hiring in the leisure and hospitality sector, meanwhile, was the slowest since November.

That's helping companies like US Foods, which last July said it was still struggling to get workers for its warehouses. The company, located just outside Chicago, was also offering more flexibility to workers such as schedules of three or four days a week instead of five.

"What we saw through the pandemic and the high wage inflation, the majority of that is behind us now," Flitman said.

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Retail Business

US Foods, which supplies American restaurants and hotels with everything from pastries to burgers, outlined plans for growth through 2027 during its investor meeting that included a $1 billion share buyback. The company, whose shares have gained about 17% this year, is also reviewing options for its restaurant-supply retail store that could include a sale.

The retail warehouse business sells bulk produce, cleaners and other packaged foods and has locations across the country. US Foods acquired that business in 2020 for $970 million — prior to Flitman's appointment as CEO — but has found few areas of overlap with its core mission.

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"It runs the potential of becoming a distraction away from our core business," Flitman said. "We are deploying a lot of financial and human capital toward that business."

"I want that business to be as successful as it can be, and I just don't think we can shepherd it like somebody who's dedicated to retail and willing to invest in that," he said.