Will a new round of panic buying empty grocery store shelves?
Grocery stores are reportedly stocking up on staples to avoid shortages in expectation of a potential second wave of coronavirus that may run up against the normal holiday rush.
According to a Wall Street Journal report:
- Southeastern Grocers bought its Thanksgiving turkeys and holiday hams over the summer, months before planning typically begins;
- Associated Food Stores recently started accumulating “pandemic pallets” of cleaning and sanitizing products in its warehouse to avoid shortfalls in the months ahead;
- Ahold Delhaize, the parent of the Giant and Food Lion chains, has already stocked its holiday inventory in warehouses and is overall storing 10 to 15 percent more inventory versus pre-pandemic levels to avoid stock-outs on fast sellers.
On its first-quarter conference call on Oct. 2, Sean Connolly, CEO of Conagra, the parent of Birds Eye, Slim Jim and other foods brands, said demand continues to exceed capacity due to retailers’ early build-up of holiday inventories, and demand is “not by any stretch normalized yet.”
Mr. Connolly added, “We’re going into a season where all the outdoor dining is going to go away in a lot of parts of the country and cold and flu season is upon us. So it’s plausible that demand can even lift from here.”
In the U.K., Tesco and Morrisons in late September already began to limit sales of some items to prevent a repeat of the panic buying that led to shortages in March. Supplies were said to be plentiful and shoppers were encouraged to buy as normal.
“We just don’t want to see a return to unnecessary panic buying because that creates a tension in the supply chain that’s not necessary,” said Tesco’s CEO Dave Lewis.
Shelves are not expected to be depleted to the same degree as in March and April due, in part, to ramped-up investments in warehousing, delivery and online capabilities by retailers.
Twenty-one states (Alaska, Connecticut, Delaware, Idaho, Indiana, Kentucky, Maryland, Massachusetts, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Wisconsin and Wyoming) reported increases in the number of new COVID-19 cases last week. Only Missouri, South Carolina and Texas saw new cases decline. Public health experts and medical professionals continue to warn that the number of cases is likely to increase as the weather grows colder and Americans spend more time indoors.
- Grocers Stockpile, Build ‘Pandemic Pallets’ Ahead of Winter – The Wall Street Journal
- Worried about more shortages, grocery stores are stockpiling goods – CNN
- Coronavirus: Time to stock up ahead of a second wave? – Retail Gazette
- Tesco boss tells UK shoppers don’t panic buy after new COVID curbs – Reuters
- Conagra Brands, Inc.’s (CAG) CEO Sean Connolly on Q1 2021 Results – Earnings Call Transcript – Seeking Alpha
- Only 3 states are reporting declines in new coronavirus cases as the US hits its highest daily rate in 2 months – CNN
DISCUSSION QUESTIONS: Do you see more benefits than risks for grocers that are stocking up on staples to protect against another round of pandemic-driven shortages? Should retailers consider imposing product purchase limits on key products at this point?