During crises, some retailers implement a form of rationing by placing limits on the number of items that can be bought. This doesn’t always prevent shortages, but it is seen as being fair and maximizes the number of people who can get items that are in high demand. However, the reality is that once panic buying sets in it is very hard to stop. People behave irrationally so talking and advising rationally may help a little but it won’t solve the issue.

It’s difficult to imagine that retailers can do anything to lessen panic buying especially given panic’s potential to induce aggressive behavior including violence. Panic buying feeds on itself and rationing often adds fuel to the fire. I agree with the article that the only solution might be through a combination of public, private and humanitarian organizations but the key will be the proximity of any action to the start of the panic.

Collaboration among public, private and humanitarian organizations can calm consumers during a crisis. The messaging needs to address and soothe consumers’ heightened emotions before trying to reason with them.

Rationing can backfire as it signals scarcity, which can incite fear, greed and hoarding among consumers.

Ration sooner than later. It’s uncomfortable, but it keeps the playing field level for as many people as possible.

Very rarely are there no indicators and alerts that panic buying and hording is going to occur. The time may be tight and there may be little the supply chain can do about it, but retailers and wholesalers usually know it’s going to happen. The key is to get ahead of the situation. Be transparent. “You don’t need to buy enough toilet paper to last a year. Let’s buy less so everyone can have enough for the next month.” “We may be out-of-stock for a little while, but your preferred item will be back on the shelf very soon.” Signage, digital messaging and people in the aisles will help.

In a period of low supply and potential risk of panic buying retailers should have a game plan on how to execute in these times. Communication with your staff and to the public is key to mitigating long-term loyalty risk of out of stocks and to help reduce panic buying.

In preparing for these crises, retailers should set up a suggested max customer order quantity for each particular item potentially at risk in their product data master so all stores are executing in the same way.

Identifying substitutes for particular segments is another way to reduce the impact by providing options for consumers. If there is a shortage of Tomato soup, create an extra display with the core items to make it from scratch.

I dont believe rationing or panic buying are tasks retailers need to control. They take the risk of investment in inventories and the storage costs and need to be able to turn inventory and convert sales in a manner that maximizes profitability and FIFO optimization. Like many market pressures on retail margins, they are external.

Rationing may sometimes backfire, but not rationing always backfires.

A retailer waiting for a government organization to take the reins is waiting for trouble. The retailer can only do what the retailer can control. In a time of scarce supply, the retailer can not control what is in the warehouse. Still, they can protect their inventory by limiting what an individual customer is permitted to buy. (How many of us recall seeing a shopper with a grocery cart -or two- filled with toilet paper.)

Let’s not ask the retailer to control what they can’t control.

One effective method to mitigate panic buying during crises is by using predictive analytics to foresee potential demand surges. This approach was highlighted in an HBR article about how Kraft Heinz used COVID response data from Johns Hopkins University, which allowed them to anticipate areas of high demand and route their products accordingly (think more Mac and Cheese on the shelf). However, this approach requires sophisticated analysis and data integration into demand planning and forecasting processes, which might not be feasible for all retailers. While rationing can help distribute resources more equitably and prevent rapid stock depletion, it can also backfire. When customers become aware of rationing, it may heighten their sense of urgency and scarcity, prompting them to buy up to the limit, even if they don’t need the maximum quantity. This applies to both consumers and retail customers, and can contribute to increased demand and exacerbate the very stock shortages that rationing was intended to prevent. Therefore, retailers should implement rationing with caution, and in conjunction with clear communication with both their consumers… Read more »

This is a poor study upon which to draw conclusions. What common retailing purchasing decisions do modern retailers have with many of those in other countries, the absurd premise that they manage demand (this is a supply side issue), and how the USA even compares to most other countries where electricity and plumbing are easily available, refrigerators are large, and the amounts of food purchased for each shopping visit is much larger than in other countries. We establishing a basis to compare panic buying around the world we have to start with a common base of understanding, common business standards, and cultures that embrace the same premise (houses in the USA are larger, with more storage, closets, etc.) along with the standard of living comparisons. This article clearly does not even start by clearing identifying this, let alone comparing the similarities.