Retail analysts urge consumers to keep calm in the weeks ahead

Retailers remain laser-focused on keeping their shelves stocked after getting caught flat-footed this spring by the outbreak of COVID-19. But concerns are mounting that consumers, fearful of a resurgence in the coronavirus and the potential for election unrest, may start stockpiling aggressively again. “The food/staples supply chain is very stable […]

Retailers remain laser-focused on keeping their shelves stocked after getting caught flat-footed this spring by the outbreak of COVID-19. But concerns are mounting that consumers, fearful of a resurgence in the coronavirus and the potential for election unrest, may start stockpiling aggressively again.

“The food/staples supply chain is very stable right now, but there’s alarm that a big buying event in the midst of a COVID uptick could lead to a buying frenzy with consumers, especially if they start to see shelves less stocked,” said Jack Buffington, an assistant professor of marketing at the University of Denver’s Daniels College of Business.

In the early days of the pandemic, toilet paper and cleaning supplies were nowhere to be found. Grocery store shelves temporarily emptied of meat, flour and other staples, even yeast, after restaurants shut down and people cooked more food at home.

Electronic gear and laptop computers briefly ran low as more people started working at home. This summer, bikes, tents and camping gear, and even expensive recreational vehicles, were tough finds as more people escaped into the great outdoors.

Shortages appear mostly seasonal right now. Canned pumpkin is a hot commodity, reflecting the time of year and wet weather that delayed the planting of pumpkin crops in some areas of the country. More broadly, cans remain in short supply as people continue to stock their pantries, but not the food needed to fill them.

As temperatures drop, expect cold and flu medicines and herbal teas to become harder to find, said Karl Gibbons, president of Third Eye Management & Associates, a management consulting firm.

Gibbons said retailers are concerned that consumers could go into another buying frenzy at the slightest indication of shortages, and they are going to great lengths to avoid that.

“People need to be sensible and they need to be realistic and they need to be considerate of other people. Do you really need to buy that item?” he asked.

A poll for the “Back-to-Normal Barometer” released at the start of the month found that six in 10 Americans said they agreed with the concern that the country is on the edge of another Civil War. And the unease is influencing their behavior, with just over half said they have stockpiled food items or essential goods in anticipation of social unrest or a resurgence in COVID-19 cases.

“This is the single most frightening poll result I’ve ever been associated with,” Rich Thau, president of Engagious, one of the three firms — along with the Sports and Leisure Research Group and ROKK Solutions — that conducted the survey, said in a release.

Even in good times, consumers could expect to not find about 5% to 7% of the specific items they were shopping for, said Gibbons. That ratio is probably running closer to 10% to 12% because of the pandemic. But it could go much higher if consumers don’t keep their wits about them.

Shortages of Clorox wipes are well-publicized and remain ongoing. Paper towel supply is spotty. Gibbons said a store manager he recently spoke is still having trouble keeping enough frozen pizzas in stock.

“They are flat and easy to store in a freezer. People are emptying shelves of them as fast as they can. You can put 20 or 30 of those into the deep freezer,” Gibbons said.

Manufacturers are making more frozen pizzas than they did before. But the problem is that demand at one point nearly doubled and remains elevated. When other consumers see store freezers empty, they grab as many pizzas as they can, which reinforces the idea of a shortage.

“People just need to calm down,” Gibbons said. “As fast as retailers are catching up, we need to help them help us.”

He doesn’t deny the powerful pull that scarcity has on human psychology. Just grab one or two extra items when out on a shopping trip, not five or 10, he advises. Stockpile if necessary, but do so gradually.

Shoppers should also realize some shortages are intentional. Large manufacturers have stopped producing less popular items so they can focus on the most popular ones. Likewise, retailers are preserving valuable shelf space for items or brands that turn over more quickly.

“Retailers will carry less variety because it makes sense for them. They want to turn their inventory faster. They may carry more inventory of things that sell well,” Buffington said.

Consumers shouldn’t interpret the reduced variety of goods as a failure of the supply chain, but rather a rational adjustment. Retailers are going to great lengths to ensure their shelves aren’t empty, including shortening store hours so they have more time to restock at night and acquiring warehouse space to keep more inventory close at hand.

“The vast majority of manufacturers and supermarkets have invested huge amounts of money in new production facilities and warehousing. They are getting all caught up,” Gibbons said. But those extra measures also cost money, which will mean higher prices.

That’s not to stay there won’t be potential weak spots in the weeks and months ahead. Buffington said the “cold chain” or the supply line for refrigerated and frozen goods could come under pressure.

“The cold chain will be the distribution mechanism for the vaccine. They are trying to build up their capacity for when that day comes,” Buffington said. Trying to distribute adequate supplies to vaccinate 300 million people, not to mention billions more globally, will require a logistics mobilization unlike any the country has seen since D-Day, he said.

Black Friday comes early this year

Another difference consumers may notice this year is that the holiday buying season is starting earlier and will be more stretched out, Ray Wimer, an assistant professor of retail practice at Syracuse University’s Martin J. Whitman School of Management, said in an email.

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