Panic buying

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Customers bulk-buying goods during the COVID-19 pandemic in Vietnam Mua hang du tru dich COVID-19 (cropped).png
Customers bulk-buying goods during the COVID-19 pandemic in Vietnam

Panic buying (alternatively hyphenated as panic-buying; also known as panic purchasing) occurs when consumers buy unusually large amounts of a product in anticipation of, or after, a disaster or perceived disaster, or in anticipation of a large price increase, or shortage.

Contents

Panic buying during various health crises is influenced by "(1) individuals' perception of the threat of a health crisis and scarcity of products; (2) fear of the unknown, which is caused by emotional pressure and uncertainty; (3) coping behaviour, which views panic buying as a venue to relieve anxiety and regain control over the crisis; and (4) social psychological factors, which account for the influence of the social network of an individual". [1]

Panic buying is a type of herd behavior. [2] It is of interest in consumer behavior theory, the broad field of economic study dealing with explanations for "collective action such as fads and fashions, stock market movements, runs on nondurable goods, buying sprees, hoarding, and banking panics". [3]

Panic buying can lead to genuine shortages regardless of whether the risk of a shortage is real or perceived without merit; the latter scenario is an example of self-fulfilling prophecy. [4]

Examples

Advertisement using panic as a selling argument. The ad warns about an upcoming typhoon and asks customers whether they have bought everything.

Panic buying occurred before, during, or following:

COVID-19 pandemic

Aftermath of selective panic buying of toilet paper during the COVID-19 pandemic Empty toilet-paper shelves at Ica Focus - Gbg (cropped).jpg
Aftermath of selective panic buying of toilet paper during the COVID-19 pandemic

Panic buying became a major international phenomenon between February and March 2020 during the early onset of the COVID-19 pandemic, and continued in smaller, more localized waves throughout during sporadic lockdowns across the world. Stores around the world were depleted of items such as face masks, food, bottled water, milk, toilet paper, [46] hand sanitizer, rubbing alcohol, antibacterial wipes and painkillers. [47] [48] [49] [50] [51] [52] As a result, many retailers rationed the sale of these items. [53]

Online retailers such as eBay and Amazon began to pull certain items listed for sale by third parties such as toilet paper, [54] face masks, pasta, canned vegetables, hand sanitizer and antibacterial wipes over price gouging concerns. [55] [56] As a result, Amazon restricted the sale of these items and others (such as thermometers and ventilators) to healthcare professionals and government agencies. [57] Additionally, panic renting of self-storage units took place during the onset of the pandemic. [58]

The massive buyouts of toilet paper caused bewilderment and confusion from the public. Images of empty shelves of toilet paper were shared on social media in many countries around the world, e.g. Australia, United States, the United Kingdom, Canada, Singapore, Hong Kong and Japan. In Australia, two women were charged over a physical altercation over toilet paper at a supermarket. [59] The severity of the panic buying drew criticism; particularly from Prime Minister of Australia Scott Morrison, calling for Australians to "stop it". [60]

Research on this specific social phenomenon of toilet paper hoarding suggested that social media had played a crucial role in stimulating mass-anxiety and panic. [61] Social media research found that many people posting about toilet paper panic buying were negative, either expressing anger or frustration over the frantic situation. This high amount of negative viral posts could act as an emotional trigger of anxiety and panic, spontaneously spreading fear and fueling psychological reactions in midst of the crisis. It may have triggered a snowball effect in the public, encouraged by the images and videos of empty shelves and people fighting over toilet rolls.

See also

Related Research Articles

<span class="mw-page-title-main">Toilet paper</span> Tissue paper for cleaning after defecation or urination

Toilet paper is a tissue paper product primarily used to clean the anus and surrounding region of feces, and—primarily for those with vulvas—to clean the external genitalia and perineal area of urine.

<span class="mw-page-title-main">Whole Foods Market</span> American natural and organic foods supermarket chain and subsidiary of Amazon

Whole Foods Market, Inc., a subsidiary of Amazon, is an American multinational supermarket chain headquartered in Austin, Texas, which sells products free from hydrogenated fats and artificial colors, flavors, and preservatives. A USDA Certified Organic grocer in the United States, the chain is popularly known for its organic selections. As of March 4, 2019, Whole Foods has more than 500 stores in North America and seven in the United Kingdom.

<span class="mw-page-title-main">Price gouging</span> Term for excessive price raises

Price gouging is a pejorative term used to refer to the practice of increasing the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair by some. This commonly applies to price increases of basic necessities after natural disasters. Usually, this event occurs after a demand or supply shock. The term can also be used to refer to profits obtained by practices inconsistent with a competitive free market, or to windfall profits. In some jurisdictions of the United States during civil emergencies, price gouging is a specific crime. Price gouging is considered by some to be exploitative and unethical and by others to be a simple result of supply and demand.

<span class="mw-page-title-main">Fast-moving consumer goods</span> Products that are sold quickly and at a relatively low cost

Fast-moving consumer goods (FMCG), also known as consumer packaged goods (CPG) or convenience goods, are products that are sold quickly and at a relatively low cost. Examples include non-durable household goods such as packaged foods, beverages, toiletries, candies, cosmetics, over-the-counter drugs, dry goods, and other consumables.

<span class="mw-page-title-main">Shortage</span> Economic demand that exceeds supply

In economics, a shortage or excess demand is a situation in which the demand for a product or service exceeds its supply in a market. It is the opposite of an excess supply (surplus).

<span class="mw-page-title-main">Food riot</span> Riot caused by shortages or unequal distribution of food

A food riot is a riot in protest of a shortage and/or unequal distribution of food. Historical causes have included rises in food prices, harvest failures, inept food storage, transport problems, food speculation, hoarding, poisoning of food, and attacks by pests.

An online grocer is a supermarket or grocery store that allows ordering via websites or mobile apps. The order can either be collected by the customer or delivered to the customer by drivers engaged by the grocer, a food delivery service, or by delivery drones and robots.

<span class="mw-page-title-main">Hoarding (economics)</span> Economic concept

Hoarding in economics refers to the concept of purchasing and storing a large amount of product belonging to a particular market, creating scarcity of that product, and ultimately driving the price of that product up. Commonly hoarded products include assets such as money, gold and public securities, as well as vital goods such as fuel and medicine. Consumers are primarily hoarding resources so that they can maintain their current consumption rate in the event of a shortage. Hoarding resources can prevent or slow products or commodities from traveling through the economy. Subsequently, this may cause the product or commodity to become scarce, causing the value of the resource to rise.

A market run or run on the market occurs when consumers increase purchasing of a particular product because they fear a shortage. As a market run progresses, it generates its own momentum: as more people demand the item, the supply line becomes unable to keep up. This causes a local shortage, which in turn encourages further hoarding.

Scarcity, in the area of social psychology, works much like scarcity in the area of economics. Scarcity is basically how people handle satisfying themselves regarding unlimited wants and needs with resources that are limited. Humans place a higher value on an object that is scarce, and a lower value on those that are in abundance. For example diamonds are more valuable than rocks because diamonds are not as abundant. These perceptions of scarcity can lead to irregular consumer behavior, such as systemic errors or cognitive bias.

<span class="mw-page-title-main">Economic policy of the Nicolás Maduro administration</span> Economics in Venezuela starting in 2013

When elected in 2013, Nicolás Maduro continued the majority of existing economic policies of his predecessor Hugo Chávez. When entering the presidency, President Maduro's Venezuela faced a high inflation rate and large shortages of goods that was left over from the previous policies of President Chávez. These economic difficulties that Venezuela was facing were one of the main reasons of the current protests in Venezuela. President Maduro has blamed capitalism for speculation that is driving high rates of inflation and creating widespread shortages of staples, and often said he was fighting an "economic war", calling newly enacted economic measures "economic offensives" against political opponents he and loyalists state are behind an international economic conspiracy. However, President Maduro has been criticized for only concentrating on public opinion instead of tending to the practical issues economists have warned the Venezuelan government about or creating any ideas to improve the economic situation in Venezuela such as the "economic war".

<span class="mw-page-title-main">Shortages in Venezuela</span>

Shortages in Venezuela of food staples and basic necessities occurred throughout Venezuela's history. Scarcity became more widespread following the enactment of price controls and other policies under the government of Hugo Chávez and exacerbated by the policy of withholding United States dollars from importers under the government of Nicolás Maduro. The severity of the shortages led to the largest refugee crisis ever recorded in the Americas.

<span class="mw-page-title-main">Discount sticker</span> Method of marking reductions in price

Discount stickers are a price markdown that are used to alert shoppers to goods which have been reduced in price, such as food approaching its sell-by date or inventory in discount clothing or outlet stores. Some stores, especially discount clothing stores, have been accused of using discount stickers to create the impression of price markdowns when there is none.

<span class="mw-page-title-main">Shortages related to the COVID-19 pandemic</span> Medical material and other goods shortages caused by the COVID-19 pandemic

Shortages related to the COVID-19 pandemic are pandemic-related disruptions to goods production and distribution, insufficient inventories, and disruptions to workplaces caused by infections and public policy.

<span class="mw-page-title-main">Economic impact of the COVID-19 pandemic in the United States</span>

The economic impact of the COVID-19 pandemic in the United States has been widely disruptive, adversely affecting travel, financial markets, employment, shipping, and other industries. The impacts can be attributed not just to government intervention to contain the virus, but also to consumer and business behavior to reduce exposure to and spread of the virus.

<span class="mw-page-title-main">Food security during the COVID-19 pandemic</span> Famines related to the pandemic caused by coronavirus disease 2019.

During the COVID-19 pandemic, food insecurity intensified in many places. In the second quarter of 2020, there were multiple warnings of famine later in the year. In an early report, the Nongovernmental Organization (NGO) Oxfam-International talks about "economic devastation" while the lead-author of the UNU-WIDER report compared COVID-19 to a "poverty tsunami". Others talk about "complete destitution", "unprecedented crisis", "natural disaster", "threat of catastrophic global famine". The decision of the WHO on 11 March 2020, to qualify COVID as a pandemic, that is "an epidemic occurring worldwide, or over a very wide area, crossing international boundaries and usually affecting a large number of people" also contributed to building this global-scale disaster narrative.

<span class="mw-page-title-main">Impact of the COVID-19 pandemic on retail</span> Aspect of viral outbreak

The COVID-19 pandemic has taken a sharp economic toll on the retail industry worldwide as many retailers and shopping centers were forced to shut down for months due to mandated stay-at-home orders. As a result of these closures, online retailers received a major boost in sales as customers looked for alternative ways to shop and the effects of the retail apocalypse were exacerbated. A number of notable retailers filed for bankruptcy including Ascena Retail Group, Debenhams, Arcadia Group, Brooks Brothers, GNC, J. C. Penney, Lord & Taylor and Neiman Marcus.

<span class="mw-page-title-main">Economic impact of the COVID-19 pandemic in Malaysia</span>

The COVID-19 pandemic in Malaysia has had a significant impact on the Malaysian economy, leading to the devaluation of the Malaysian ringgit (MYR) and the decline in the country's gross domestic product. The pandemic also adversely affected several key sectors including entertainment, markets, retail, hospitality, and tourism. Besides shortages in goods and services, many businesses had to cope with social distancing and lockdown restrictions, which affected their operations and revenue. The pandemic also drew attention to workplace safety and the exploitation of migrant workers working in Malaysian industries.

A global energy crisis began in the aftermath of the COVID-19 pandemic in 2021, with much of the globe facing shortages and increased prices in oil, gas and electricity markets. The crisis was caused by a variety of economic factors, including the rapid post-pandemic economic rebound that outpaced energy supply, and escalated into a widespread global energy crisis following the Russian invasion of Ukraine. The price of natural gas reached record highs, and as a result, so did electricity in some markets. Oil prices hit their highest level since 2008.

<span class="mw-page-title-main">Pandemic baking</span> Increase in home baking

During the 2020 COVID-19 lockdowns, home baking experienced an explosion of interest, which was termed pandemic baking, lockdown baking, or quarantine baking. The increase in home baking sparked by the pandemic outlasted the lockdowns, resulting in an overall increase in interest in home baking.

References

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  2. ↑ Bruce Jones & David Steven, The New Politics of Strategic Resources: Energy and Food Security Challenges in the 21st Century (eds. David Steven, Emily O'Brien & Bruce D. Jone: Brookings Institution Press, 2015), p. 12.
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