Panic buying ceased, so why are supermarket shelves still empty?

Panic buying has eased and supermarkets have imposed limits on products. So, why are shelves still empty?

Why supermarket shelves are still empty

Panic buying has eased, and supermarkets have imposed limits on products to prevent stockpiling. So why are some supermarkets still missing everyday items?

Coles chief operating officer Matt Swindells told Channel 7’s Sunrise it takes time for shelves to recover from a buying frenzy.

“You get this large surge in demand some seven weeks ago, and that has to ripple its way back up the supply chain, all the way through transport, the retailer’s warehouse, the supplier’s warehouse, the suppliers factory and even into the supplier’s raw material and ingredient providers.”

In a country Australia’s size, that takes time, he said.

Restrictions are coming off various products, with toilet paper expected to be replenished shortly. But the example of flour shortages helps explain the power of the “ripple effect” in supply chains.

Mr Swindells said more people are baking at home during the coronavirus self-isolation, increasing demand for cake mixes and flour.

“And flour has to be manufactured and transported and distributed and stacked… Again, we’re working as hard as possible but in some of those categories where we have high demand… it’s a big challenge ...”

Such surges in demand cause the “bullwhip effect”, says Manoj Dora, Reader - Operations Management at Brunel University London.

“These irregular orders in the downstream of the supply chain (the shops) have a knock-on effect upstream of the supply chain (storage facilities and suppliers).”

Workers scramble to meet demand and by the time the items appear “demand is down because people have already stockpiled”.

“The majority of supermarkets operate using a ‘just-in-time’ approach to deliveries. This means they have a constant carousel of stock being delivered and put on shelves, to be sold the next day, based on sophisticated models of what people normally buy.

“They do not carry excess stock because it is cheaper to store it in big out-of-town warehouses with lower rents.”

When a pandemic causes a surge in demand for particular items, supermarkets can’t restock quickly enough and orders are spread across many stores.

“In other words, and on many occasions, supermarkets do actually have products in their storerooms, but they do not have enough staff to bring it to the shelves as fast as they are taken from them,” says Jose Arturo Garza-Reyes, head of the Centre for Supply Chain Improvement at the University of Derby.

Food supply chain experts insist their systems are geared for natural disasters, such as hurricanes, another occasion when consumers stockpile, and they are resilient and adaptable. There are no shortages of essentials, with most supermarket supply chains – grocery stores, food-service distribution centres, regional distribution centres and manufacturing facilities – collectively holding up to four months’ worth of food.

It’s just that prolonged demand for specific items brings unique pressures.

Human psychology is one of the factors. Academics have found that consumers “compensate for a perceived loss of control by buying products designed to fill a basic need, solve a problem or accomplish a task”.

“This is what we’re seeing as people rush to buy rice, cleaning products and paper goods in illogically large proportions,” wrote Andy J. Yap, Assistant Professor of Organisational Behaviour, INSEAD graduate business school.

Manoj Dora simply points out that “the panic buying of essentials such as pasta, rice, tinned food and toilet rolls causes a domino effect that makes others feel compelled to stock up themselves. This is not only unnecessary; it makes the problem worse for everyone …”

This means stores that offered thousands of items suddenly face massive demand for a handful.

The next problem is that supply chains in the west are geared towards supplying restaurants as well as stores. “Food services may have represented 50 per cent, now they represent about 10 per cent,” says Fred Boehler, CEO of US-based supply chain firm Americold Logistics.

Orders have suddenly lurched toward retail and most of the food provided for restaurants in bulk must now be supplied in much smaller packaging for home consumers.

Then there are precautions necessary to safeguard workers slowing down procedures.

All over the world, grocery stores are gradually overcoming the initial shock of panic buying.

“That food supply chain is continuing to operate. You’re not hearing of people starving in Italy,” says Lowell Randel, vice-president of the Global Cold Chain Alliance (GCCA) in the US. “Grocery stores have remained open and food is available.”

So, what do the experts say a humble consumer should do?

Carry on and shop calmly, says Caitlin Welsh, director for the Global Food Security Program at the Centre for Strategic and International Studies in the US.

“People should take a deep breath, and shop for one to two weeks maximum,” she told the BBC. “If you don’t find what you need, come back tomorrow.”

Are you finding what you need at your supermarket?

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    COMMENTS

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    BrisNed
    21st Apr 2020
    10:50am
    It is noticeable that the largest amount of still unavailable or low stock products has been generic items whilst higher-priced brand items have experienced short-term reduced availability then been restocked more quickly. The primary issue with the major supermarkets is there are so many stores to be supplied and transport logistics being inadequate to quickly react to manage the increased demand experienced due to the pandemic. There is a clear need for all businesses to review and update their business planning to more adequately sustain their business continuity whilst ensuring the safety and welfare of staff and customers.
    Daveh
    21st Apr 2020
    11:39am
    I noticed that the generic home brand stuff of Woolies and Coles was in stock more than the brand names.
    LENYJAC
    21st Apr 2020
    10:59am
    If the boffins that run these supermarkets had of stopped these idiots panic buying right from the start, they would not be in this predicament now...……….
    Tanker
    21st Apr 2020
    11:25am
    you cannot legislate against stupidity.
    On the Ball
    21st Apr 2020
    1:04pm
    I will add to Tanker's post(S). And paraphrase your great comment Lenyjac:

    'If the boffins that run this Government had of stopped these idiots from coming ashore or landing right from the start, they would not be in this predicament now...……


    "you cannot legislate against stupidity."

    Seems funny that the costly hard-to-sell toilet paper is back on the shelves, AND the prices aren't marked! Come on ACCC!
    So is it too hard to give a staffer somne sticky tape and a texta? Or is it too costly to employ thinkers nowdays?
    Sceptic
    21st Apr 2020
    3:03pm
    Had "of." what is wrong with just "had?"
    LENYJAC
    21st Apr 2020
    10:59am
    If the boffins that run these supermarkets had of stopped these idiots panic buying right from the start, they would not be in this predicament now...……….
    Easy Rider
    21st Apr 2020
    11:56am
    Actually it was the "idiot panic buyers" that were the smart ones. They have plenty of food in the pantry where as many others don't. Me...well I always over the past 20 or 30 years made sure we always had a stock of food in reserve just in case of some type of emergency so we didn't have to panic buy...just top up the reserves.
    Daveh
    21st Apr 2020
    11:37am
    In respect of toilet there is another factor. The machines make industrial type toilet paper in 300m rolls and domestic type in 12~18m rolls. The industrial machines can not make the domestic type. After the initial panic buying there was a change in demand due to the partial lock down and people working from home. Less demand for the industrial type as work place buildings closed and shopping centers deserted BUT greater demand for domestic type with people at home. The manufacturers can not gear up quick enough to supply increased the domestic demand like the article says the supply chain works on the 'just in time' basis.
    On the Ball
    21st Apr 2020
    1:08pm
    That's a good point Daveh.
    I thought it was akin to the shortage of hand cleaner and liquid soap.
    People who didn't usually wash their hands, are now being more hygenic.
    Same with toilet paper....
    Mootnell
    21st Apr 2020
    1:08pm
    Right from the beginning government was reporting we had 3 factories working around the clock to produce domestic toilet paper.
    Just like failure to stop the Most important ship they also failed to stop mass panic buying right from the outset. Any twit could have worked out if you stop planes you also have to stop ships.
    Everything has been done add hock and after the fact, one could be forgiven for thinking complete and utter orchestrated chaos.
    Hillbillypete
    21st Apr 2020
    11:53am
    One thing I have noticed, in all the years of buying long life milk I have never payed more than a $1 for 1L,Shame on you Woolworths for charging $1.50 you are ripping people off!
    Eddy
    21st Apr 2020
    1:26pm
    Hillbillypete, where do you shop; I have not noticed any price gouging by Woolies. The 1 litre Devondale Full Cream UHT milk I usually buy was $1.45 before the epidemic and is still $1.45 when I had my home delivery on Sunday. Also the Vitasoy UHT Soy milk was $2.45 before and is still $2.45 after. Similarly with my staples, the prices have not changed for decaf tea, diced tomatoes, canned corn, rice, Moccona coffee, canned tuna, paper towel etc etc, although I cannot get the Quilton King size unscented toilet paper anywhere (I prefer unscented as the 'fragrances' they use on other varieties make me ill). Are you trying to generate an unsubstantiated controversy.
    leek
    21st Apr 2020
    1:58pm
    Eddy- yep there has been price gouging. I paid $4;70 for an Iceberg lettuce about a month ago, then the next fortnight I paid $4.50. Today I paid $2.50 for the same lettuce. I have noticed other items had increased as well, but not as obvious as the lettuce. I was horrified to pay $4.70. might have been a supply issue with letttuces. Not sure. But not really appropriate to pay that much in the first place.
    Eddy
    21st Apr 2020
    2:25pm
    Come on Leekie, the prices of fresh produce normally varies from week to week, even day to day. One can hardly use prices of fresh produce as evidence of price gouging, sometimes I pay only $2 for an avocado and at other times up to $4.50, bananas fluctuate just as much. It all depends on availability, source and market prices.
    Blossom
    22nd Apr 2020
    1:01am
    I noticed that some items are quite a lot dearer at Woolworths than Coles.
    One particular frozen item is $6.00 at Coles and is $6.49 at Woolworths.
    Having friends who work at a Wholesale Distribution Centre I have been told that they aren't receiving any extra stock at the moment. As a result of that there simply isn't the items to send to their independently owned supermarkets (they don't supply Coles or Woolworths). One large country Supermarket is struggling to get basic food items. Because of the distance they only get one delivery a week. They may have to get Govt. consent to supply local people only as some basic necessities they are literally running out of. They are a 2 day trip from Adelaide. Their largest close town is 1 1/2 hours to 2 hours away from them.
    BrisNed
    21st Apr 2020
    12:24pm
    Have people considered the impact COVID-19 has on your household budget some have been positive such as saving the cost of transport to travel to work, canceled holidays and not eating out whilst others have been negative such as the increased cost of grocery products, increased electricity and internet use? How do you think your household budget is fairing? Also, ponder the enormous increase to revenue and profits for the grocery stores resulting from the reduced number of in-store specials and increased sales due to panic buying. Should businesses be paying danger money to staff exposed to consumers on a daily basis should they also be rewarding consumers for their loyalty through more discounting or other reward bonuses. What do you think?
    leek
    21st Apr 2020
    1:53pm
    Danger money- interesting in Crown casino, the Mahogany and teak rooms allow people to smoke. I spoke to an employee once and asked about if he was happy to be around the smokers(I do not smoke). he told me that they have to sign a form to say that they are aware that they could get cancer from passive smoking, and he said that they also get paid more money, if they sign the form and work in either of those rooms.
    yep so Crown casino pays danger $$.
    VinceD
    21st Apr 2020
    12:55pm
    Some years ago businesses in general embraced "just in time" management. It meant changing priority from ensuring supply to minimising the costs of stock in transit and in store. Many people said that if anything happens to demand or the supply chain then it will immediately be "just too late" management. This is the main cause of the supply problems. The government even allowed our fuel supplies to function that way. We keep three weeks surplus fuel in Australia and the Government keeps none. So much for spending billions on obsolete submarines. We could be seriously affected if our imports were blocked and totally disabled by a handful of drones.
    Mootnell
    21st Apr 2020
    1:13pm
    Spot on VinceD.
    That old adage ‘failure to plan is planning to fail’ has never been more evident.
    Of Course there are those that would say do better, to which I reply, give a Mother of kids the reins and move the hell over.
    Eddy
    21st Apr 2020
    2:29pm
    The other applicable adage is 'hope for the best but plan for the worst'.
    Eddy
    21st Apr 2020
    2:29pm
    The other applicable adage is 'hope for the best but plan for the worst'.
    leek
    21st Apr 2020
    1:48pm
    I shopped this morning, and there was flour and heaps of toilet paper still at 8:30am in the morning. I have not seen flour for a good 4 weeks, even early in the morning. So it was good to see that back. there was pasta, but seem to be one brand only. I was able to get everything I wanted. Eggs is my big issue, and I notice that they had heaps of the Coles brand eggs but not the other brands. I am hoping that I will be able to soon shop when I want and not have to set the alarm to get up early to make sure I can buy my eggs.
    Jean
    21st Apr 2020
    2:17pm
    leek I hear what you are saying, Coles and Woolworths will now be pushing the brands THEY prefer to promote (like their generic brands) because they know people need certain goods and if they can't buy their favourite brands they are forced to buy what Coles and Woolworths are "pushing" onto customers. This is blackmail !
    Eddy
    21st Apr 2020
    2:41pm
    No Jean, it is called business. Now there are some brands I prefer but cannot buy at Woolies or Coles but I can get at IGA. So I buy from IGA. I do not trust these generic brands. I had an acquaintance who was an industrial chemist in the food industry. his job was to sample and test. A few years ago he told me that generic brands may be reasonably nutritious but they contain more 'filler' materiel and less food content than the more expensive brand names.
    Hasbeen
    21st Apr 2020
    2:33pm
    It is not just super markets & groceries.

    I could not get my usual blood sugar control medication toady, at my usual pharmacy or any of the 3 others in town.

    A few phone calls when I got home could not locate any with in 30 kilometres.
    Willhedickus
    21st Apr 2020
    3:15pm
    My experience has been over the last twelve months Coles shelves had been poorly stocked and shortage of products where blatantly obvious. Coles in general has been pushing their own brand and slowly deleting common brand items which are sourced from all over the world including baked goods. I do not see why the consumer is forced to buy inferior products instead of locally produced goods an products. If this virus has taught us one thing it is to be self sufficient. As the international food trade pyramid is about to collapse.
    BrisNed
    21st Apr 2020
    3:49pm
    Both Coles and Woolworths have removed thousands of branded products from the shelves of their stores to make way for their generic products. Where we used to have up to 5 or 6 brands to choose we now have 2 or 3 branded and 2 or 3 generic product items to choose. Often the brand products are superior in quality but higher-priced resulting in many opting for the cheaper generic products. Consumers are being programmed into purchasing behaviour. This is not unlike the automotive industry which predominantly manufactures and offers Australians automatic transmission cars claiming "consumers prefer automatic transmission". this is not really fact when the only option for most vehicles is an automatic transmission which is more expensive to maintain. I for one and like others enjoy the freedom of choice and experience of driving a manual car. Is big business really interested in customer service and satisfaction, do customers really any more or are they just interested in conditioning the population to accept an established norm to increase profits
    Semiretired
    21st Apr 2020
    11:07pm
    Car manufacturers limited the number of models offered with manual transmission purely because of lack of demand. If as many people as you say still wanted to change gears themselves, the car companies would still be offering them, as indeed they still do in the UK and Europe. And they don't cost more to maintain. I've owned automatic cars for nearly 30 years, and never had any trouble with them. Apart for some troublesome DCG models from Ford and VW, automatics are pretty much foolproof these days, and have been for a long time.
    saintagnes
    21st Apr 2020
    4:21pm
    if restrictions or correctly termed, rationing had been put into place in January none of this would have happened. I live rural and usually buy many items in bulk rather than travel 50k each week to a limited Woolworths. I have not seen a toilet roll for 7 weeks. Sugar, flour, frozen peas , pasta are non existent.
    I guess staff have first pick.
    Ruaware
    21st Apr 2020
    4:57pm
    The toilet paper manufacturers assured the public last month that they had ramped up production and were going 24/7, we are also now being told the panic buying has eased, (Homes must be filled to their roofs with tp) so where is the toilet paper? I still get empty shelves with the occasional exception of tiny packs at exorbitant cost.
    As for the “early shopping hour”, its a waste of my sleep as there is no more on the shelf than there was at close of business the night before.
    BrisNed
    21st Apr 2020
    5:05pm
    Ruaware as each store receives stock deliveries at varying times they will restock shelves at varying times throughout the day. The challenge is to find out when this occurs at your local store/s e.g. if the store receives its deliveries around 9-930am their shelves are not restocked until approximately 11am.
    Tarlo
    21st Apr 2020
    5:41pm
    I see bakeries selling 20 Kg of flour in their shops. From $15--30 Dollars. Who the heck is doing all this cooking? Or are they sending stockpiled groceries elsewhere. OR hoarding ready for the end to come??? What a crazy world of fear.
    The Thinker
    21st Apr 2020
    10:41pm
    Tarlo, flour has an expiry date. Many women are out of work and trying out their culinary skills.
    Farside
    22nd Apr 2020
    8:39pm
    not just women baking their own bread Thinker, and Tarlo, with the 10kg bags not available in the supermarket then it makes sense to get 20kg from a bakery and split it with a friend or two
    Darts44
    22nd Apr 2020
    5:56am
    Yesterday, I came back from shopping for fresh veggies .
    1 onion, 2 bananas, 1/2 cauliflower, 1 Lebanese cucumber, 2 tomatoes.
    Time to take my multivitamin to fend off the scurvy.
    Darts44
    22nd Apr 2020
    7:16am
    I still feel very lucky to have food.
    Spare some thought for people in Africa and South America, where more people will die from
    starvation that the virus
    Hillbillypete
    22nd Apr 2020
    7:30am
    Eddy, wake up and open your eyes, Woolworths and Coles are ripping people off, the only place I found was very fare with there pricing was IGA they still were selling every day specials as normal and the only place I could buy as much sugar as I want and other goods with no limit. All this just west of Brisbane!
    Eddy
    22nd Apr 2020
    1:10pm
    Yes Pete, I am awake and have my eyes open, but I do not look for problems were they do not exist. I do not know what the current situation is in south east Queensland, I have not lived in Queensland since 1975, but from what you say there is a big difference between where you live and where I live. There is nothing I now buy on-line which appears to be priced any differently to when I shopped in-store.
    Eddy
    22nd Apr 2020
    1:10pm
    Yes Pete, I am awake and have my eyes open, but I do not look for problems were they do not exist. I do not know what the current situation is in south east Queensland, I have not lived in Queensland since 1975, but from what you say there is a big difference between where you live and where I live. There is nothing I now buy on-line which appears to be priced any differently to when I shopped in-store.
    Farside
    22nd Apr 2020
    8:55pm
    I have to laugh at you Ipswich guys Hillbillypete, of course you can buy all the sugar you like being in Ipswich but it begs the question why were you shopping for sugar at Coles and Woolies if you could get all you wanted from IGA?


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