Don’t panic (again): here’s why Melbourne’s supermarket shortages will quickly pass


Flavio Romero Macau, Edith Cowan University

You’re nervous, I get it.

Panic buying is back, not as strong as in March and more localised in Melbourne. Once again shop shelves have been emptied of pasta, toilet paper and other household items.

When will things get back to normal? Soon, more than likely in a matter of days, rather than weeks.

What is different now

Last time most of Australia was involved. Taken by surprise, supermarkets struggled with shoppers across the nation going into “hoard mode” simultaneously.

Normally supermarket supply chains run like well-oiled machines with highly predictable demand. Products move slowly and continuously from factories to distribution centres to stores. Supply chains are “skinny”, with stores ensuring they have just enough stock to meet that demand, particularly for low-margin products like toilet paper that take up a lot of shelf space.

A spike in demand can thus quickly empty shelves. It can prompt other shoppers to also start stockpiling, due to fear of missing out, making the problem worse.




Read more:
Stocking up to prepare for a crisis isn’t ‘panic buying’. It’s actually a pretty rational choice


Responding to this situation in March took weeks, as supermarkets adjusted their orders and manufacturers ramped up production to supply more products. The supermarket chains used every trick in the book to balance supply and demand – including imposing limits on the quantity of products shoppers could buy at any one time.

What is happening

This time suppliers are more prepared. Their lean supply chains have built some fat. Inventory has not been at a minimum. Limits on the amount customers can buy have been quickly reintroduced.

So why are shelves empty at all if this time businesses are more responsive?

Well, one thing has not changed: there’s still a lag in supply chains responding to any sudden change in demand.

With toilet paper, for example, orders are generally fulfilled in about ten days. Last time it took about three weeks for more paper to make to it shops.

But, given the information of a spike in demand in Victoria made its way from shops and distributors to manufacturers almost instantly, things should happen faster this time.




Read more:
Disagreeability, neuroticism and stress: what drives panic buying during the COVID-19 pandemic


Retailers have already moved to answer the call by rerouting deliveries to increase supply where it is needed the most. The only thing stopping supply returning to normal is the speed of transportation and restocking.

Also, the spike in demand is heavily localised in Melbourne. While there have been reports of panic buying and stockpiling in other states, it’s nowhere near the level of a few months ago.

So shortages in Victoria will not be as prolonged as last time. Redirecting inventories will be a lot simpler.

Think of it this way. Panic buying during March was like a big detour in the supply-chain highway given the whole country was involved. Now it is more like a car with a flat tyre reducing traffic speed locally. It’s not less dramatic for the people affected, but much simpler from a supply-chain perspective.




Read more:
A toilet paper run is like a bank run. The economic fixes are about the same


The new normal

So don’t panic. There’s less reason to join in the panic buying (or stockpiling, if you think of it as a rational response to lockdown) this time. We’re likely to experience these disruptions so long as COVID-19 outbreaks continue. The “new normal” is like a faulty switch. Regions will be on and off the spot until the pandemic is over.

But as long as the entire nation does not move backwards all at the same time, supply chains from one state will quickly support the one experiencing difficulties.

There’s really no reason for you to add to the problem.The Conversation

Flavio Romero Macau, Senior Lecturer in Supply Chain Management and Global Logistics, Edith Cowan University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Disagreeability, neuroticism and stress: what drives panic buying during the COVID-19 pandemic


Peter O’Connor, Queensland University of Technology; Jeromy Anglim, Deakin University, and Luke Smillie, University of Melbourne

Panic buying has returned to Australia in the wake of its second-biggest city experiencing a spike in COVID-19. The Victorian government has reimposed stay-at-home restrictions on 36 of Melbourne’s 321 suburbs in response.

Once again supermarket stores are being emptied of toilet paper and other consumables.




Read more:
Grattan on Friday: Scott Morrison undeterred on COVID re-opening despite rise in toilet paper index


But this panic buying isn’t just in affected areas. It’s not even limited to Victoria. Empty supermarket shelves have been reported in Canberra, Mittagong in the New South Wales southern highlands, and Bathurst in the NSW central tablelands.

As a preventative measure Coles and Woolworths have reintroduced nationwide limits on the amount of toilet paper shoppers can buy. Coles is also limiting packets of pasta, rice and long-life milk nationally, while Woolworths has so far done so only for Victoria.

Prime Minister Scott Morrison has called the panic buying “ridiculous”, and previously dubbed it “unAustralian”.

But are admonishments helpful in stopping panic buying?

That depends on what motivates people to panic buy. The COVID-19 pandemic has given us the chance to ask.

What motivates panic buying?

We’ve surveyed more than 600 Australians, first in April then again in June, about their stockpiling behaviour, attitudes and feelings.

Our results show about 17% of shoppers admitted to panic buying in April. About 6% were continuing to stockpile two months later, joined by an equal number who did not buy in April and feared missing out again.

Panic buyers and stockpilers were more likely to be younger and under financial and personal stress. A number of personality traits were also significant predictors. Those less agreeable, more anxious and less able to cope with uncertainty were more likely to panic buy.

These findings suggest panic buyers are likely to feel a lack of control in their lives and worry more about COVID-19. Stocking up on items gives them a sense of security in one part of their lives. They are likely to be less cooperative and considerate of others.

Studying panic buying

We recruited our 600 participants via consumer-survey company Pure Profile, which ensured our sample was representative of the Australian population.

We asked if they had “stockpiled”, and how much, in response to COVID-19, as well as questions about their income, education attainment, attitudes and personality.

Participants indicated their agreement with more than 100 statements such as:

  • I am someone who is emotionally stable, not easily upset
  • I spend too much time following COVID-19 related news coverage
  • Obtaining food and basic household items has been a major source of stress.



Read more:
Why are people stockpiling toilet paper? We asked four experts


Agreeableness

The strongest predictor of “early” panic buying was low “agreeableness”.

Agreeableness describes how motivated people are to cooperate with and consider the feelings of others. It is typically expressed as polite and compassionate behaviour. We measured this trait by asking respondents to agree or disagree with statements such as “I am someone who is sometimes rude to people” and “I am someone who can be cold and uncaring”.

Measures of agreeableness predict a range of considerate and helpful behaviours such as treating others fairly and helping others in need.

In our results, 23% of low scorers on agreeableness reported panic buying compared with 14% of high scorers.




Read more:
The science of being ‘nice’: how politeness is different from compassion


Neuroticism

The second strongest predictor was high “neuroticism”.

Neuroticism describes a person’s experience of negative emotions such as worry, anxiety and uncertainty. Those with this trait tend to agree with statements such as “I often feel sad” or “I am temperamental and get emotional easily”.

High scorers experience negative emotions more intensely and more often. Our data shows that 22% of high scorers on neuroticism reported panic buying compared to 12% who scored low.

Our results also suggest these individuals are driven to stockpile to limit their need to go to the supermarket as much as fear of store supplies running out.

Financial stress

Stress also appears to be a significant factor. Panic buyers in our survey were significantly more likely to have been stood down or had their hours reduced due to COVID-19.

Those 32 and younger were about 40% more likely to have panic bought than those older. This is likely due to the economic impacts hitting younger workers hardest, as well as young families generally facing more financial and domestic strain.

Panic buyers also reported more time worrying about COVID-19, and more conflict in their household as a result of the pandemic.

Fear of missing out

The fear of missing out was the main predictor of respondents stockpiling in June. More than half these “late” stockpilers did not do so in April. They were far more likely to agree with the statement “Difficulties in obtaining basic household has been a major source of stress” than the April panic buyers.

So while panic buying is indeed more common in “selfish” people, it might also serve as a coping mechanism. People who experience higher levels of instability and uncertainty – due to personality disposition and/or their life circumstances have been disrupted – are most likely to panic buy and stockpile.




Read more:
A toilet paper run is like a bank run. The economic fixes are about the same


Stockpiling gives such individuals some sense of control and reduces one source of potential stress in their lives – the possible difficulty to obtain essential food and household products.

With more outbreaks of panic buying predicted over the next 12 months as new COVID-19 hotspots emerge, we need more strategies than condemnation to address that behaviour.The Conversation

Peter O’Connor, Professor, Business and Management, Queensland University of Technology; Jeromy Anglim, Lecturer in Research Methods in Psychology, Deakin University, and Luke Smillie, Associate Professor in Personality Psychology, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Don’t panic: Australia has truly excellent food security



Shutterstock

Steve Hatfield-Dodds, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) and Peter Gooday, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

COVID-19 has taken Australia and the world by surprise. Coming after severe droughts in eastern Australia, concerns have been raised about Australian food security.

The concerns are understandable, but they are misplaced.

Despite temporary shortages of some food items in supermarkets caused by an unexpected surge in demand, Australia does not have a food security problem.

An Australian Bureau of Agricultural and Resource Economics and Sciences study released today outlines why Australia is one of the most food-secure countries in the world.

Supermarket shelves reflect a surge in demand

Uncertainties around the impacts of COVID-19 have triggered a rapid increase in purchasing by consumers seeking to stockpile a range of items, resulting in disruption to stocks of some basic food items.

This disruption is temporary and not an indication of food shortages.

Rather, it is a result of logistics taking time to adapt to an unexpected surge in purchasing.

We are highly food-secure

Food security refers to the physical availability of food, and to whether people have the resources and opportunity to get reliable economic access to it.

Australia ranks among the most food secure nations in the world, and is in the top 10 countries for food affordability and availability.

Australians are wealthy by global standards and can choose from diverse and high-quality foods from all over the world at affordable prices.

Most Australians can afford to purchase healthy food that meets their nutritional needs, and as a result, Australia has the world’s equal-lowest level of undernourishment.

We import only 11% of our food

Most food and beverages consumed in Australia are produced in Australia.

But not everything that Australians like to eat is produced here. So we import about 11% of the food and beverages we consume by value.

The imports are mainly processed products (including coffee beans, frozen vegetables, seafood products, and beverages), along with small amounts of out-of-season fresh food.


Imported products account for 11% of expenditure on food and beverages

Imports of processed and fresh (primary) food and beverages, as a share of total food and beverage consumption (including tobacco and alcohol) by value, three year average 2016-17 to 2018-19. Does not include takeaway and restaurant meals.
ABS 5368.0, 5204.0

It is possible that disruptions to food imports from COVID-19 (or something else) could result in temporary shortages of some products, restricting consumer choice in the same way as cyclones have restricted access to Australian bananas.

It would be unlikely to have a material impact on food security – in terms of ensuring a sufficient supply of healthy and nutritious food, even if higher prices for or limited availability of specific products disappoints or inconveniences some consumers.

Australia produces more food than it consumes

Australia typically exports about 70% of agricultural production.

The level of exports varies across sectors. Some of our largest industries, such as beef and wheat, are heavily export-focused. Others, like horticulture, pork and poultry, sell most of their products in Australia, with an emphasis on supplying fresh produce.


Most Australian agricultural production is export oriented

Share of agricultural production exported by sector, 3 year average, 2015-16 to 2017-18.
Source: ABARES 2020

Australia’s large exports, even in severe drought years, act as a shock absorber for domestic supply.

They allow domestic consumption to remain stable while exports vary, absorbing the ups and downs associated with Australia’s variable climate and seasonal conditions.


Domestic food consumption is stable, while agricultural exports vary

Domestic consumption and export estimates for wheat, beef, rice, fruit and nuts, 2006-07 to 2020-21. Fruit and nuts covers table grapes, apples, pears, oranges, mandarins, peaches, mangoes, bananas, almonds and macadamias. f = forecast.
Source: ABARES 2020

The outlook for rain is good

After a hot and dry 2019 and widespread drought conditions in NSW and Queensland, above-average recent rains and positive forecasts provide the basis for the best start to Australia’s agricultural production season in years.

While current prospects for winter crops are good, more rain is required for these to be realised.

The Bureau is forecasting that grain production is likely to return to close to average levels, with a significant chance of higher production given the good start to the winter cropping season.


Wetter than average conditions are likely across agricultural areas from May to July 2020

Map shows chance of exceeding median rainfall for the period May to July 2020, showing above average rainfall is likely or very likely across all inland areas of Australia, including the wheat sheep zone.
Source: BOM, April 9, 2020

For livestock producers, better seasonal conditions provide the opportunity to rebuild herds and flocks following a relatively long period of destocking.

Our access to food is secure

Australia is one of the most food-secure countries in the world, with ample supplies of safe, healthy food. The vast majority of it is produced here in Australia, and domestic production more than meets our needs, even in drought years.

While we import about 11% of our food and beverages, disruptions to these imports would not threaten the food security of most Australians.

The Bureau of Agricultural and Resource Economics and Sciences is forecasting a return to close to average levels of grain production, with a significant chance of higher production, given the good start to the winter cropping season.




Read more:
Helping farmers in distress doesn’t help them be the best: the drought relief dilemma


The analysis released today explores related issues in more depth, including the contribution of irrigated agriculture to Australian food security, levels of global grain stocks, and the contributions of international trade and Australian exports to food security in other countries.

Australia’s agricultural producers do rely on global supply chains and imported inputs. Shortages or disruptions to these inputs have not yet been significant or widespread, but could reduce productivity and profitability.

While action is already in train to address key issues, it will be important for business and government to continue actively monitoring and managing these risks.The Conversation

Steve Hatfield-Dodds, Executive Director, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) and Peter Gooday, Acting Executive Director Agriculture, Water, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Psychology can explain why coronavirus drives us to panic buy. It also provides tips on how to stop




Melissa Norberg, Macquarie University and Derek Rucker, Northwestern University

In an address on Wednesday, Prime Minister Scott Morrison expressed his dismay at the hordes of “panic buyers” sweeping supermarket shelves clean across the country:

Stop hoarding. I can’t be more blunt about it. Stop it. It is not sensible, it is not helpful and it has been one of the most disappointing things I have seen in Australian behaviour in response to this crisis.

It started with toilet paper, and now many non-perishable foods are difficult to source, as shoppers stockpile in preparation for the worst.

But is there a rationale for such behaviour? And how can we move beyond our psychological impulses to shop smarter, and consider the needs of others?

COVID-19 – an unwitting stress test

The coronavirus outbreak is not only a time of uncertainty, but also a period in which many of us are experiencing social isolation. Both of these factors can psychologically motivate people to buy things they don’t need.

Feeling unable to tolerate uncertainty is associated with more extreme hoarding behaviour. Hoarding entails the collection of more items than can be feasibly used, to the point of impeding the functionality of a home. Even though the behaviours we’re seeing may not be “hoarding” in this sense, they’re likely driven by the same psychological mechanisms.

One of the strongest predictors of hoarding behaviour is an individual’s perceived inability to tolerate distress. If it’s in a person’s general nature to avoid distress, they may be at risk of buying more products than they can feasibly use during the pandemic.

For such people, it may be difficult to believe authorities when they announce supermarkets will not close. Or, if they do believe them, they may decide it’s best to “prep”, just in case things change.




Read more:
When possessions are poor substitutes for people: hoarding disorder and loneliness


The coronavirus also reminds many people of their own mortality, and this can lead to an increase in spending to offset fear.

Even if a person typically feels able to handle distress, they may still end up buying more than they need. Seeing empty shelves can trigger an urge to snatch what is left. Research on the “scarcity heuristic” suggests we assume items are more valuable if they are in low supply.

Also, consumer goods are more than functional. Products and brands also serve psychological purposes and can change how we feel. For example, some people turn to alcoholto alleviate anxiety or distress.

How to overcome psychological forces

So how can we make rational decisions, when multiple psychological forces make this difficult?

While no perfect remedy exists, cognitive behavioural therapy (CBT) techniques can help people avoid making decisions based on unhelpful urges and emotions. CBT has been shown to improve intolerance of uncertainty, and reduce anxiety and fear.

CBT involves problem-solving and engaging in avoided behaviour to test the validity of one’s beliefs. The idea is to challenge unhelpful thoughts, and make decisions based on evidence.

To apply this approach when shopping during the coronavirus pandemic, you should start by taking stock of the items you already have at home, and how long they will last.

When stocking up, it’s important to limit waste and be considerate. It’s not helpful to buy food that spoils, or buy so many products that others, including the elderly, experience hardship. Buying 100 rolls of toilet paper is useless if it takes a year to use them.




Read more:
Scott Morrison has said we’ll face at least 6 months of disruption. Where does that number come from?


Food waste can be limited by developing meal plans for the next two to three weeks, keeping in mind when certain products expire. By focusing your attention on what you will realistically use during this time, you can make more informed decisions about what to buy.

It’s OK to feel anxious

When shopping, take a list with you to guide your purchases, and try your best to stick to it. This way, you’ll be less likely to succumb to anxiety-driven purchases triggered by the sight of empty shelves, or thoughts of supermarkets closing. That said, be willing to buy substitutes if certain items are sold out. You can plan for this in advance.

You may start to feel anxious when only buying items for use in the immediate future. That’s OK. Numerous research trials have shown people can tolerate anxiety, and that changing unhelpful behaviour reduces anxiety in the long run.

Research has also shown people who chronically hoard can tolerate distress better than they think. So, while anxiety may be inevitable for some on their next shopping trip, they will likely be able to tolerate it. And it may be reduced if the above strategies are adopted.

Even before the COVID-19 pandemic, Australians had a problem of buying things they didn’t need. We’re the ninth-largest contributor of household waste per person in the world, spending more than A$10.5 billion each year on goods and services we rarely use. Over half of that expenditure is for food that gets wasted.

Perhaps understanding the psychological mechanisms underpinning our shopping behaviour can help us make more rational purchases during this time of uncertainty.The Conversation

Melissa Norberg, Associate Professor in Psychology, Macquarie University and Derek Rucker, Professor of Marketing, Northwestern University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

>Desperately seeking toilet paper, pasta or hand sanitiser? Some relief is just weeks away



A supermarket in south London, March 15 2020.
Facundo Arrizabalaga/EPA

Flavio Romero Macau, Edith Cowan University

Panic buying, shop shelves emptied of toilet paper, hand sanitiser, pasta and other household supplies, supermarkets policing limits on buying products, Amazon and eBay stopping opportunists from selling items at exorbitant prices. When will things get back to normal?

The good news: well before the coronavirus crisis is over.

Sign up to The Conversation

Usually a well-oiled supply chain guarantees no shortages or excesses in products. Products bought in the supermarket are quickly replenished, ensuring stock is always available.

Logistics for toilet paper, hand sanitiser and pasta are usually highly efficient. Companies are pleased to have lean, skinny supply chains. These products sell at low margins. For the profit they return, they can take up a lot of space in a store (as in the case of toilet paper). So distributors want to keep inventory at a minimum.

Happily, demand is usually highly predictable, so product moves slowly and continuously from factory to distribution centre to store and finally to you.

These, however, are not usual days.

The shelves for these products (and others) are empty as everyone goes into “hoard mode” simultaneously. If a product is sold out, all you can do is wait for more to arrive. And because these supply chains are slow and unresponsive, you might also buy as much as you can the next time.




Read more:
There’s plenty of toilet paper – so why are people hoarding it?


It is easy to see how this dynamic becomes a self-fulfilling prophecy: shelves are emptied simply because people predict they will be empty sooner rather than later.

The idea that one’s expectations drive actions that confirm the initial thought is as ancient as the Greek Oedipus in his tragic journey to become the king of Thebes and as modern as Lord Voldemort going after Lily and James Potter. Sociologist Robert Merton was among the first to bring the concept to economic behavour, noting in a 1948 paper:

The self-fulfilling prophecy is, in the beginning, a false definition of the situation evoking a new behavior which makes the originally false conception come true.

A supermarket in Berlin, March 16 2020. The signs says: ‘Only 20 rolls maximum’.
Kay Nietfeld/DPA

Ramping up supply

That said, a slow and skinny supply chain doesn’t mean paralysed.

The information of a spike in demand made its way from shops and distributors to manufacturers a few weeks ago. Now manufacturers, suppliers and transporters – all profit-driven – are moving to answer the call.

Their challenge is finding a balance between being too conservative and underproducing (leaving shelves empty) or being too exuberant and overproducing (getting lumbered with the cost of unsold stock). Ramping down production and distribution will take as much time as it did to ramp up.

Manufacturers and distributors, however, now have weeks of information about the degree of extra demand being put on usually very predictable supply chains. With that information, the only things stopping supply returning to normal well before coronavirus contamination reaches a peak is a major disruption to production or transportation – and so far there’s no sign that will occur.

Local advantage

So which shelves will be replenished sooner? If you have a product at home, take a look at the package. Where is it made?

Local supply chains are much more responsive. Products made in your country, especially in your region, will hit the shelves sooner. If the product comes from overseas, response rates are significantly different and you have to allow 10 to 12 weeks to be safe.

Does that mean you can assume – with hand sanitisers, toilet paper and pasta made in generous quantities in every country – regular stock will return sooner rather than later?

Well, no. It depends. Things become more complicated depending on whether average demand increases.

It is hard to imagine people going to the loo all that more often because of the coronavirus, so the supply of toilet paper should be back to normal quickly.

Some quick research on lead times in the toilet paper industry shows most orders are fulfilled in about 10 days (three weeks at most). There have been reports in the past week that manufacturers have increased shipping by more than 20%. So you should expect things to get back to normal within about three weeks, depending on local circumstances.

With pasta, it is easy to imagine people cooking at home more rather than eating out, so there might well be an increase in consumption that adds to demand. This too, though, should be dealt with in a short time, possibly in a month or two.

For hand sanitisers, an estimate is really problematic. I’d be guessing.

Here are the complications. Greater demand for hand sanitiser should be expected for as long as the crisis continues – possibly longer. Manufacturers may reach capacity quickly. To produce more will take investment and time.

Expansion can be accelerated but still depends on new buildings, new equipment, new skilled employees and possibly new suppliers. This can’t be achieved in weeks or months. So if you haven’t seen stocks in weeks, don’t pin your hopes on things changing any time soon.




Read more:
A toilet paper run is like a bank run. The economic fixes are about the same


Fortunately hand sanitiser is what economists call a substitute good. It’s quite replaceable with some other form of soap. So too is pasta. You can always have noodles, or rice, or wraps, tacos and so on.

Even toilet paper has its substitutes. But all the indications are it shouldn’t come to that.The Conversation

Flavio Romero Macau, Senior Lecturer in Supply Chain Management and Global Logistics, Edith Cowan University

This article is republished from The Conversation under a Creative Commons license. Read the original article.