Why Are American Shoppers Panic Buying Again?
The reasons for panic buying are different this time around.
Posted Nov 23, 2020
"We are fundamentally in a different place than we were in March and April." – Geoff Freeman, Consumer Brands Association.
We have seen this show already once this year, in full CinemaScope no less. When the Covid-19 pandemic began in early March, the daily number of new Coronavirus cases in the United States was far lower than it is today. But the level of panic was far higher. The Dow Jones Index was dropping by hundreds of points every day. The media was full of stories about the despair of stranded cruise-ship vacationers, laid-off restaurant workers, and the relentless march of the disease in Italy, Spain, and New York City. Experts from every field were scaring us by predicting much worse things to come.
However, the most memorable headlines of the pandemic's first days were about the run on toilet paper in grocery stores nationwide. Not a spare roll was to be found anywhere, and such was the panic and desperation, toilet paper instigated fist-fights and plaintive concerts in supermarket aisles (see the videos below). The most striking photographs of the pandemic's early days were ones of panic buying, aisle after aisle of empty store shelves, and long lines of frazzled shoppers in checkout lines with overflowing carts.
Panic buying at the onset of the pandemic was rational and perhaps even smart consumer behavior.
At the time, I pointed out that while this type of buying behavior appeared panicky and irrational on a superficial level, it made a lot of sense. Three reasons, in particular, suggested that far from hoarding or impulse shopping, panic buying during the early days of the Covid-19 pandemic was a rational response to a terrifying situation.
1) The Covid-19 pandemic came out of the blue. Many people were not prepared for anything like it. Their pantries and refrigerators were empty. With the prospect of a lengthy and complete lockdown, stocking up on food and other necessaries was the only sensible thing to do, even if it meant waiting in line for hours and braving the fear and desperation of other shoppers. This reasoning applied to every sort of grocery item, from food to cleaning products, and of course, toilet paper. Marketers acknowledge the prudence of this shopping behavior in normal circumstances. They even have a name for it: pantry stockpiling.
2) As the pandemic erupted, consumers also panic bought as a way to deal with their fears and anxieties. None of us had encountered a pandemic in real life before. We had only experienced it in dystopian movies or books. In this reality horror show where each of us played a starring role, filling our pantries and refrigerators gave us an opportunity to exert some control over at least a critical part of our lives. If nothing else, we thought, at least we would have enough to eat in the coming weeks.
3) There was a real concern at the time that because of the disruption caused by lockdowns and the unforeseen higher demand for groceries, there would be significant shortages of essential items in the future. Even supply chain experts expressed worry. With this uncertainty, it made eminent sense for shoppers to stockpile groceries, so that they would have enough to get through what could become a season of scarcity and rationing. Marketers call this "defensive purchasing," and it was smart shopping behavior given the situation.
It can be argued that not panic buying in the early days of the pandemic would have been a risky and imprudent course of action for shoppers without full pantries and refrigerators.
The situation is completely different in November 2020.
Here we are more than eight months later, and panic buying has recommenced, in tandem with an exponential increase in the number of infections and more regional lockdowns. This time around, some of the same product categories are the focus of shoppers' attention – toilet paper, cleaning wipes, bleach, and shelf-stable food items.
None of the rational reasons for panic buying that made sense in March apply now in November. Shopper buying and consuming habits have changed significantly in the last eight months. Consumers have bigger stores of foods and necessaries on hand, and pantries and refrigerators only need to be topped up.
In the aggregate, fear and anxiety because of the unknown are also less of an issue. Most of us are painfully acquainted with the pandemic's psychological effects. We have settled into lifestyles that are consistent with our risk perceptions. For many people, worry and fear have been replaced with pandemic fatigue. They are resigned to the status quo.
Manufacturers and retailers have had time to prepare for the contingencies of greater demand and have been stockpiling inventory in their warehouses in preparation for a winter Covid-19 resurgence, so we don't have to. There's considerable evidence that severe shortages are extremely unlikely to happen. It doesn't make sense for consumers to purchase defensively with the same gusto now as it did in March.
Then why are shoppers panic buying now? I propose two reasons are at play. The first reason is that panic buying is a reflexive response to bad news. The worsening new infection numbers, and even more, the mobility restrictions that are setting in are triggers to panic shop. When local government officials impose highly visible curfews, for example, it triggers behavioral scripts in many shoppers. They reason that "things must be bad, I need to shop," and "Grocery shopping is what I did last time to prepare, so I must do it again."
The second reason is even more insidious: the impulse to herd. Shoppers are panic buying in response to observing others' panic buying through social and news media. In March, this instinct led many people to prepare for the months of working from home. Now, however, herding is little more than a biased behavioral response with potentially harmful effects.
When I read a post on Facebook recently that the shelves at the local supermarket we shop at were starting to get bare, it triggered a few moments of anxiety. I experienced a strong momentary urge to go out and buy more before the supermarket ran out even though we have plenty of food. I restrained myself. The stores and the manufacturers are a lot more prepared now than they were in March. There's no reason to panic and follow the panic buying herd.