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‘Technical Difficulties’ Shut Down PFX Ordering System; Retailers Worry About Possible Shortages

Pet Food Experts heads into day four of a system disruption that now involves law enforcement, and stores are feeling the impact.

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“Technical difficulties” have halted all receiving and ordering through Pet Food Experts (PFX), with leadership at the company stating Thursday that law enforcement and third-party specialists are involved to determine the source of the disruption. Affected retailers are expressing concern about how this will impact their ability to provide products to their customers, on top of ongoing supply chain issues stemming from the pandemic.

Trouble began for the distributor — which serves more than 6,500 pet specialty stores in the U.S. and carries nearly 100 brands — Tuesday (May 3) morning. It posted an alert on its website:

“All PFX ordering systems and inbound phone lines are currently down. In the meantime, connect with a PFX Live Chat Representative for immediate assistance. Thank you for being so understanding as we work to resolve these issues.”

On Wednesday (May 4), PFX President and CEO Michael Baker shared an update via email and through the company’s website:

Dear Valued Business Partner,

Early Tuesday morning, Pet Food Experts began experiencing technical difficulties, which resulted in a disruption to certain internal computer systems and our ability to provide service. As a result, we had to temporarily pause all order processing and customer deliveries. This is not the PFX experience we aim to deliver, and we share your frustration.

We are working closely with internal and external specialists to address the situation, conduct a thorough investigation into the source of the disruption, and restore the impacted systems to secure full functionality. We have full confidence in the teams working tirelessly around the clock to restore our operation and serve you.

-In the meantime, here are a few things you should know:

-Expect delivery disruptions into early next week.

-Check the Systems Status page on the PFX website for timely updates when more information becomes available.

Connect with our PFX Live Chat Representatives should additional questions arise.

We know you expect the best from PFX – and you should, and I want to apologize to everyone who has been impacted. Pausing our deliveries is always PFX’s last resort. It’s not only difficult on you and your customers, but it’s also hard on our people, who truly want nothing more than to take care of you.

Please know that all of us at PFX are committed to delivering the service and reliability you have come to expect from us. With grit and determination, our team has overcome numerous challenges, and you have my commitment that we’ll continue to take care of you as we work to deliver the seamless experience you expect from PFX.

Peace,
Michael Baker
President & CEO

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Baker updated retailers and brands again Thursday (May 5) afternoon via one of his trademark “Fireside Chats,” during which he was joined by PFX Chief Operations Officer William May and Executive Vice President Jim Alden.

“Understandably there is a great sense of unease with the unique challenge that we continue to face here at Pet Food Experts, what we are referring to as technical difficulties,” Baker said.

“The goal today is to do what we do best in the case of trying to bring you all together and come together as one as a community. In this particular case, I just want to level-set your expectations. There’s not much we’re going to be able to share with you in the way of a path out of the situation we’re in, but we felt it only right based on our emails that went out yesterday to try to give you some sense of an update and do it in a more personal way than in another letter.”

Baker went on to thank retailers and vendors for their support during the “unprecedented technical difficulties” and asked for continued patience.

May spoke next:

“Beginning this past Tuesday, we started to experience technical difficulties, which resulted in a disruption of certain computer systems. This was immediately reported to law enforcement. They are actively working on an investigation. We’re also very diligently working with third-party specialists to investigate the source of this disruption. We’re going to confirm its impact on our systems and get us restored back to full functionality as quickly as possible.”

The reference to “law enforcement” fueled speculation on social media. As to when the distributor would be fully operational again, May said, “We just honestly do not currently have a timeframe as to when that will occur.”

Alden continued the chat and reiterated that orders were not being accepted and that products were not being received into warehouses. He pointed retailers and vendors to email and live chat as the best ways to stay connected.

“Our email is up so you can connect with your reps,” Alden said. “Our live chat is up and running on the website, and we plan to put up updates as best as we can as quickly as we can on the website. So those are the best ways to hear from us and connect with us.”

Baker also shared that use of the website’s live chat is up 700 percent as retailers ask questions and check in for updates.

Alina Niklison McCue, owner of Toiffer Pet Outfitter in Missoula, MT, worried Thursday about what impact the disruption would have on her business.

“We are a brand-new (less than a year old) business. I just opened a second location two weeks ago. As a small business just starting up, I rely on the weekly distributor deliveries to stock my shelves as I don’t have big storage or capital to make large stock purchases. We are already out of stock on many food products, and we are scrambling to get our shelves stocked from other distributors. Being in a small town with few distributors options, this is going to hit us hard.”

Danny Offenbacher, owner of City of Paws Petcare in Philadelphia, pointed out how distributor exclusivity makes the situation even more problematic.

“Our biggest order each week is from PFX, and some brands are exclusive to them, such as Fromm and Stella & Chewy’s, which we order a ton of. I was anticipating a big delivery on Monday, and I’m now very concerned we won’t have much in stock next week for those brands.”

Offenbacher sees this as a reminder to plan ahead to avoid supply chain issues.

“Now more than ever is the time for food rotation conversations!”

To deal with the uncertainty of this situation and manage customer reaction as best as possible, Nicole Voegtle, owner of EarthWise Pet Voorhees in Township, NJ, has taken a proactive approach.

“We won’t know exactly how this will affect us until we see what people need for the next week. Our stock levels are okay right now, and we could get lucky and people want what we do have. I have posted signs with the brands affected (like Fromm), explaining why I might be out and when I expect more.”

Amy Schiek, owner of Lucky Dogs in Skaneateles, NY, also has plans to better weather such disruptions in the future.

“We’re stressed about what will happen with our customers when we run out of the products they rely on us for. What we’ve learned is that despite our long-term satisfaction with Pet Food Experts and our intention to stay with them, we need to protect ourselves by maintaining good status with other distributors also.”

And Cory Giles of The General Store in Collinsville, IL, shared how he feels better prepared for this situation because of changes he has already made.

“We are fortunate that the Pet Food Experts issues haven’t affected us as much as a lot of other stores. We didn’t have an order this week, and if we can’t get an order next week it will certainly be a nuisance but nothing we can’t work through. Because of all the shortages in general and because our business has been growing tremendously over the past two years, I’ve increased our inventory levels on a lot of items (particularly pet food).

“The silver lining to all the disruptions over the past two-plus years is that our customers couldn’t possibly be any more understanding about price increases and shortages since everything seems to be either more expensive or out of stock.”

He also shared his perspective from the manufacturer side.

“More than anything, I feel awful for the folks at Pet Food Experts. Besides working in my family’s pet business, I have an engineering degree and 15 years experience managing manufacturing companies where I used to be the one they called when they had a major problem, so I have some understanding of the situation, though I never had to deal with anything as grim as being closed for days with apparently no clear end in sight.”

FRIDAY (May 6) A.M. UPDATE:

On Friday, Baker responded to our request for follow-up information:

“Our investigation into this incident is ongoing. We want to assure our customers that the privacy and security of their information is one of our top priorities.

“The Indie pet community has endured many challenges this past year and we are sensitive to the pressures our customers are facing. These headwinds are not only difficult on our valued retail partners but ultimately the millions of pet parents who rely on us to provide the very best for their beloved pets.

“We remain intentional and determined as we implement innovative strategies to improve our continuum of services – on the front lines, behind the scenes, and online.”

PFX leadership will update customers again at 3 p.m. Eastern on Friday during another Fireside Chat in its PFX Insider Group. Customers not already a member can join here.

FRIDAY (May 6) P.M. UPDATE:

Baker went live in the PFX Insider Facebook group Friday afternoon to answer top questions being asked of the company. Here are highlights with context from affected retailers:

Baker responded first to the question that has been top of mind for many retailers.

“The number one question seems to me, and I’m going to read this verbatim here because I have to, ‘Has my company’s data been compromised? Was this a breach?’ The privacy and security of your information is our top priority, the investigation is ongoing. If it is identified that your personal information has been compromised, you will be notified pursuant to applicable law. And that would be at the individual level. Obviously if I had information to share on that front, I would have done so already, including right now, so you can read into that what you like, but most importantly, if and when we become notified that that is the case, you will be notified personally at the personal level.”

The company has not shared the specific cause of its system disruption. Store owners concerned that their financial information may have been compromised have proactively been contacting their banks regarding their business accounts.

Danny Offenbacher, owner of City of Paws Petcare in Philadelphia, PA, says, “I bank with Chase, and they were only sort of helpful when I called. I set up alerts for transactions exceeding $100. The only other thing they could do is close the account and open a new one with a new number, which is the last resort (and was not ideal with all the other automatic withdrawals I have). There was no such thing as ACH monitoring, but they did say they could stop a payment. I’ll be monitoring my account closely as this unfolds.”

Retailers also have been asking PFX if there was any way to place orders outside of its online system — or to even pick orders themselves.

Baker said, “The easy answer is ‘No, you can’t.’ There are all sorts of reasons why we can’t have customers in our warehouses picking orders. I would say that the insurance might be one of them. And from a technical standpoint, one of the first systems we had to pull, and it remains inoperable in the normal sense, is the internet. All six warehouses as well as here at headquarters are either off the internet or on a really limited special wifi that is obviously protected from what we’re dealing with and what we’re going through. It would be nearly impossible…”
He shared that they are currently hand-picking “a dozen or so orders” as a test to start chipping away at the 408 orders placed Tuesday that were supposed to ship Wednesday.

“We have Plan A Plan B Plan C and probably a plan D while I’m on this call with y’all. And one of them is, obviously if things don’t get better faster, how do we go back to the old days and pick on paper, invoice you on paper on a diner slip, and then have an IOU system that you pay us later, I guess. Everything is on the table, but at this point, I don’t think we’ll be inviting you to pick your own orders any time soon, but stay tuned. If that’s feasible, we’ll let you do it.”

Next, Baker addressed the issue of distributor exclusives. Retailers who can only get certain brands through PFX have to wait to restock and potentially move customers to other products in the meantime.

“Unfortunately, there are several lines of products that are exclusive to PFX in my area, including two of my three bestselling lines of raw, and trying to assist customers who feed those is going to be a nightmare,” Shane Somerville of Paddywack in Mill Creek, WA, says.

To address this, retailers have asked whether PFX would waive exclusive brand contracts during this time.

Baker responded, “I will say, I’m going to be polite, no thank you, no way. This should not be and will not be necessary as we’re nearing the end of this investigation. Along the way, we’re keeping very clear track with third-party specialists. Our own IT team are virtually killing themselves to try to figure out what’s broken, what the fix is and how quickly can we turn these things back on, on the other side of this. Many of these things can’t be touched until the investigation is complete, so it’s a little bit of a race against time trying to figure out what happened, and then all we care about is business, people and service to you, customers and vendors, how do we get back in business. We’ll flip that switch and let you know about it as soon as possible.”

Baker shared what he and PFX have learned from this situation.

“When the investigation is complete, and I can share further perspective or somebody from PFX can share further perspective on specifically what happened to us and why and how, we will most importantly tell you all the things we’re doing so this never happens again to us, and I think what will be really critical for all of you whether you’re a big business or small so it doesn’t happen to you. I honestly wouldn’t wish this experience on my worst enemy.”

To watch the full video of the Facebook Live, join the PFX Insider Facebook group.

SUNDAY (May 8) P.M. UPDATE:

On Sunday, PFX posted the following on its website and in the PFX Insider Facebook group:

“[May 8, 2022] While significant progress has been made, additional time is needed to ramp up our servers before delivery schedules can be shared. As a result, we will not be taking orders on Monday, May 9 like we had hoped. We will provide a status update tomorrow regarding schedules for the remainder of the week. In the meantime, connect with your PFX representative or chat live for more information. Thank you again for your understanding and loyalty.”

For ongoing discussion of the situation with fellow store owners and managers, and to hear solutions they have come up with to the many challenges retailers are facing, join the PETS Facebook group.

MONDAY (May 9) P.M. UPDATE:

On Monday, PFX posted the following on its website and in the PFX Insider Facebook group:

“Great news! After gallons of caffeinated beverages, we’re officially back in business! Please check your email for specifics regarding this week’s ordering and delivery details. We’re excited to get back to caring for you! 🥳

We have reached out for more information and will update this story as soon as possible.

Editor’s note: We will update this story as updates become available.  

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