Apr 25, 2020

What Panic Buying Tells Us About American Consumer Mentality

First, they came for the hand sanitizer and disinfectant soap. Then in the 2nd week of COVID-19 pandemic shopping, buyers cleared retailers’ shelves of all the toilet paper. The 3rd week of widespread and ever-expanding shelter-in-place orders brought grocery shortages of baking yeast and spiral hams. And by the 4th week, CNN Business reported, “We’re in the ‘Hair Color’ Phase of Panic Buying.” 

“Lately, we’ve seen more grooming products [being sold], people are starting to need a haircut,” Walmart CEO Doug McMillon told the Today Show. “You start to see more beard trimmers and hair color.”

Massive runs on the seemingly random retail items named above would have been inexplicable a couple of months ago. But they make perfect sense now given our evolving adaptation to a new stay-at-home reality that’s creating unexpected new consumer needs. (The exception here is spiral hams. People do traditionally buy more hams in the lead-up to Easter).  

But many of the items have remained highly sought-after and difficult to find. It’s probably not news to you that retailers are having trouble keeping their shelves stocked with paper towels and toilet paper. But to those working behind the scenes, the scope of that demand is staggering. 

“In the last 5 days, we’ve sold enough toilet paper for every American to have their own roll,” Walmart’s McMillon said in that April 10 interview. “That’s just in 5 days.

What’s Driving Panic Buying During COVID-19

We do not use the term “panic buying” derisively or as a condescending insult to shoppers. COVID-19 is a global pandemic, so panic and fear are completely justified feelings. A terrible and unpredictable crisis is unfolding before our eyes, and buyers are coping with and responding to a public health and economic cataclysm the likes of which we have never seen before.

And technically, much of this is not even “panic buying.” It’s just a different pattern of buying when we all work from home, rarely drive, and almost never leave the house. Consumers are adapting to this new stay at home reality.

Survivalists may have thought that when the hunker-down times came, we’d be dealing with zombies, foreign invaders, or some sort of devious government takeover. But in reality, we’re dealing with unexpected home-schooling, overeating, binge-watching, and large volumes of sheer boredom.

“As people stay at home, their focus has shifted,” McMillon told Today. “It started out with food and consumables and then it moved on to puzzles and games.”

Some of our new buying patterns, like the new demand for flour, yeast, and hair clippers, are unexpected but completely sensible consumer responses to the shifting shelter-in-place landscape. Grocery stores initially ran out of bread, so people with plenty of time on their hands made the very practical decision to start baking their own. The cutting and coloring of our own hair was motivated by the spread and extension of stay-at-home orders and nonessential business closures.

Other new consumer behaviors, though, are a little less than rational.

Why People Are Buying So Much Toilet Paper

Some of the most striking images of the coronavirus outbreak have been of hauntingly empty streets and hilariously empty toilet paper and paper towel aisles. The paper towel shortage makes sense—we are disinfecting surfaces at a far more obsessive rate than ever before. But Walmart selling “enough toilet paper for every American to have their own roll” in just 5 days does not make sense in terms of household budgeting during a crunch, so we have to look at retail psychology.

“In times of uncertainty, people enter a panic zone that makes them irrational and completely neurotic,” University College London consumer and business psychology lecturer Dimitrios Tsivrikos told CNBC. “In other disaster conditions like a flood, we can prepare because we know how many supplies we need, but we have a virus now we know nothing about.”

He adds that buyers find something emotionally comforting about the bulky packaging, tactile softness, and relative affordability of a large 24-pack. “When you enter a supermarket, you’re looking for value and high volumes,” he said.

The toilet paper craze of 2020 is not just an American phenomenon. Business Insider points out that toilet paper is being rationed in Australia, Japan, Spain, and the United Kingdom thanks to similar panic-buying patterns. 

We cannot predict how these toilet paper, hand sanitizer, and spiral ham shortages will play out. But we have a pretty good sense of what other products are facing wild new levels of consumer demand—and the retail products whose sales are crashing.

What Consumers Are Buying Under Shelter-In-Place

Toilet paper demand is getting all the attention. But in general, most retail and grocery items have seen their sales either flatten or decline since peaking in that notorious mid-March week that many states and cities issued stay-at-home orders. Except one. Frozen food sales have continued to surge and have now hit double their average volume for this time of year, according to consumer analytics firm IRI.

Vices are also booming, a metric that is unlikely to surprise you. IRI found that liquor sales keep creeping up and are now more than 50% above their average sales volume compared to the same calendar period in previous years. Cigarettes are another enduring favorite, and while tobacco sales are only a few percentage points higher than previous years, that’s a reversal of the drastic decline that sector had been experiencing. And you may have heard about high business at marijuana dispensaries too, which tells us that vice sectors are well-positioned in a nervous economy. 

Analysts say that retail stores are seeing fewer shoppers as stay-at-home drags on but that stores are seeing a bigger “basket size,” or average amount of each purchase.

What People Are Not Buying During COVID-19

Obviously, people are not buying anything from stores that aren’t open. But even the benefactors of the initial stay-at-home sales boom are seeing a new downturn in demand for their products.

Household cleaning products like detergent, dish soap, and air fresheners have declined pretty dramatically after selling like hotcakes at the beginning of shelter-in-place orders. Over-the-counter healthcare products also enjoyed a huge initial sales surge but waning demand the longer we stay at home.

“We’re starting to see some of the nonfood items slowing down in terms of sales,” Larry Levin, IRI’s executive vice president of consumer and shopper marketing, said in a recent webcast. “We see a decline in general merchandise, a little bit of a decline in beauty [product sales] as people have already stocked up.”

Panic Buying Trends to Come

What’s going to be “the next toilet paper,” or retail item for which there will be sudden unprecedented demand? It’s a fair bet that protective face masks will be highly sought after in the very near future. Wearing face masks in public is now mandatory in the state of New York, and the cities of Los Angeles and Miami are requiring face masks for entering the premises of an essential business. Similar orders are likely to expand nationwide, making a run on masks a likely candidate for panic-buying status.

Again, the panic is justified. Even the wealthiest consumers are cautious and worried, and the likelihood of long-term recession is difficult to deny. 

Historians may compare coronavirus panic buying to previous panics, but this one’s different. The buying patterns are driven by the fact that we’re stuck at home in our pajamas, making bread and watching Netflix, riding out the storm in a voluntarily shut down economy. What we’re seeing right now doesn’t so much tell us about American buying patterns—it tells us more about the moment and how we’re rising to the moment by laying on the couch all day.

About the author

Joe Kukura
Joe Kukura
Joe Kukura is a San Francisco freelance writer whose work also appears in SF Weekly and SFist. He’s written financial advice for NerdWallet, tech industry analysis for the Daily Dot, sports content for NBC Bay Area, and good, old-fashioned clickbait for Thrillist.

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