Finance:Panic buying

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Short description: Unusual pattern of purchase
Tokyo, Japan
Gothenburg, Sweden
Aftermath of selective panic buying of toilet paper during the COVID-19 pandemic

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.

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]

Fishing-rod panic buying in Corpus Christi, Texas, during the COVID-19 pandemic

Panic buying can lead to genuine shortages regardless of whether the risk of a shortage is real or perceived; the latter scenario is an example of self-fulfilling prophecy.[4]

Examples

Panic buying occurred before, during, or following:

  • The First (1914-1918)[5][6][7] and Second World Wars (1939-1945).[8][9][10]
  • The 1918–1919 global influenza pandemic ("Spanish flu") led to the panic buying of quinine and other remedies for influenza and its symptoms from pharmacists and doctors' surgeries.[11] Sales of Vicks VapoRub increased from $900,000 to $2.9 million in a year.[12]
  • In the First Austrian Republic in 1922, hyperinflation and the rapid depreciation of the Austrian krone led to panic buying and food hoarding, which continued until a rescue backed by the League of Nations prevented an economic collapse.[13]
  • Bengal famine of 1943.[14]
  • 1962 Cuban Missile Crisis led to panic buying of canned foods in the United States.[15]
  • The 1973 toilet paper panic in the United States.[16]
  • The 1979 oil crisis led to panic buying of oil, led by Japan.[17]
  • The 1985 arrival of New Coke led many consumers to panic buy the original Coke.[18][19]
  • Year 2000 problem – food.[20][21]
  • 2001 – panic buying of metals, gold and oil on international commodity markets following the September 11 attacks.[22]
  • Between January and February 2003, during the SARS outbreak, several rounds of panic buying of various products (including salt, rice, vinegar, vegetable oil, antibiotics, face masks, and traditional Chinese medicine) took place in the Chinese province of Guangdong and in neighboring areas such as Hainan and Hong Kong.[23]
  • 2000 and 2005 UK fuel protests.[24][25]
  • 2005 Jilin chemical plant explosions – water, food.[26]
  • 2008–2016 United States ammunition shortage – panic buying by gun owners who feared tougher gun control laws under President Barack Obama was one cause of ammunition shortages.[27][28]
  • In September 2013 during the Venezuelan economic crisis, the Venezuelan government temporarily took over the Aragua-based Paper Manufacturing Company toilet paper plant to manage the "production, marketing and distribution" of toilet paper following months of depleted stocks of basic goods—including toilet paper—and foodstuffs, such as rice and cooking oil. Blame for the shortages was placed on "ill-conceived government policies such as price controls on basic goods and tight restrictions on foreign currency" and hoarding.[29]
  • Dakazo – Amid decreased support before the 2013 Venezuelan municipal elections, Venezuelan president Nicolás Maduro announced the military occupation of stores on 8 November 2013, proclaiming "Leave nothing on the shelves!"[30] The announcement of lowered prices sparked looting in multiple cities across Venezuela.[31] By the end of the Dakazo, many Venezuelan stores were left empty of their goods.[30] A year later in November 2014, some stores still remained empty following the Dakazo.[30]
  • In September 2021, panic buying of petrol led to empty fuel filling stations across the United Kingdom . A lack of tanker drivers was blamed, with Brexit being the primary cause according to most Road Haulage Association respondents.[32]
  • In November 2021, panic buying of groceries took place in the British Columbia Interior and Fraser Valley owing to the impacts of the 2021 Pacific Northwest floods.[33]
  • On March 3, 2022, panic buying of IKEA kit furniture and home appliances occurred in Russia due to the company's decision to close their 17 Russian stores in light of the 2022 Russian invasion of Ukraine. Extensive queues were reported in IKEA's Moscow and Saint Petersburg stores, and customers attempted to enter from the exit doors when entrance doors were closed.[34]
  • In May 2023, the Malaysian states of Penang and Kedah experienced panic buying of bottled water due to an interruption in tap water supply lasting less than 24 hours.[35]
  • In Aug 2023, after the discharge of radioactive water of the Fukushima Daiichi Nuclear Power Plant, people in China began panic buying salts and radiation detectors because of the public anxiety towards the radioactive water released.[36][37]

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,[38] hand sanitizer, rubbing alcohol, antibacterial wipes and painkillers.[39][40][41][42][43][44] As a result, many retailers rationed the sale of these items.[45]

Online retailers such as eBay and Amazon began to pull certain items listed for sale by third parties such as toilet paper,[46] face masks, pasta, canned vegetables, hand sanitizer and antibacterial wipes over price gouging concerns.[47][48] As a result, Amazon restricted the sale of these items and others (such as thermometers and ventilators) to healthcare professionals and government agencies.[49] Additionally, panic renting of self-storage units took place during the onset of the pandemic.[50]

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.[51] The severity of the panic buying drew criticism; particularly from Prime Minister of Australia Scott Morrison, calling for Australians to "stop it".[52]

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.[53] 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.

Gallery

  • A cartoon of two women with the above panel having a woman hoarding and the below panel having the two share resources via rationing

    A pro-rationing poster from the United States in World War II showing the effects of panic buying goods

  • Shoppers at a Wal-Mart in Mexico City panic buying canned food during the 2009 flu pandemic

  • Venezuelans grabbing for items during the Dakazo, an event of the crisis in Venezuela

  • Shoppers in London panic buying canned food and toilet paper during the COVID-19 pandemic

  • Panic buying at the Giant supermarket in Franklin Farm, Virginia, during the COVID-19 pandemic in March 2020

See also

References

  1. ↑ Yuen, Kum Fai; Wang, Xueqin; Ma, Fei; Li, Kevin X. (18 May 2020). "The Psychological Causes of Panic Buying Following a Health Crisis". International Journal of Environmental Research and Public Health 17 (10): 3513. doi:10.3390/ijerph17103513. PMID 32443427. 
  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.
  3. ↑ William M. Strahle & E. H. Bonfield. Understanding Consumer Panic: a Sociological Perspective, Advances in Consumer Research, Volume 16, 1989, eds. Thomas K. Srull, Provo, UT: Association for Consumer Research, pp. 567–573.
  4. ↑ "Toxic leak threat to Chinese city". The Repository. 8 March 2020. https://www.cantonrep.com/news/20200303/we-need-to-calm-down-coronavirus-fears-spark-lsquopanic-buyingrsquo-of-toilet-paper-hand-sanitizer-and-water. 
  5. ↑ Faris, Robert (1948). Social Disorganization. The Ronald Press Company. p. 524. https://books.google.com/books?id=rFEAAAAAMAAJ. 
  6. ↑ Hardach, Gerd (1981). The First World War, 1914–1918. University of California Press. p. 198. ISBN 978-0-520-04397-8. https://books.google.com/books?id=q_G_Qnag_TcC&pg=PA198. 
  7. ↑ Watters, Mary; Library, Illinois State Historical (1952). Illinois in the Second World War: The production front. Illinois State Historical Library. p. 58. ISBN 9780912154190. https://books.google.com/books?id=Si0gAAAAMAAJ. 
  8. ↑ Spaull, Andrew David (1982). Australian Education in the Second World War. University of Queensland Press. p. 100. ISBN 978-0-7022-1644-2. https://books.google.com/books?id=stEsAAAAMAAJ. 
  9. ↑ Jackson, Ashley (2006). The British Empire and the Second World War. A&C Black. p. 505. ISBN 978-1-85285-417-1. https://books.google.com/books?id=cghbp0WbhxAC&pg=PA505. 
  10. ↑ Morgan, Philip (2008). The Fall of Mussolini: Italy, the Italians, and the Second World War. OUP Oxford. p. 66. ISBN 978-0-19-157875-5. https://books.google.com/books?id=-UttMMRXi9AC&pg=PA66. 
  11. ↑ Honigsbaum, Mark (2013). "Regulating the 1918–19 Pandemic: Flu, Stoicism and the Northcliffe Press". Medical History 57 (2): 165–185. doi:10.1017/mdh.2012.101. ISSN 0025-7273. PMID 24070344. 
  12. ↑ Burden, Lizzy (20 March 2020). "Is panic buying irrational? Here's why it can seem to make economic sense". The Telegraph. https://www.telegraph.co.uk/business/2020/03/20/panic-buying-irrational-can-seem-make-economic-sense/. 
  13. ↑ Colin Storer, A Short History of the Weimar Republic (I.B. Tauris, 2013), p. 102-03.
  14. ↑ Archibald Percival Wavell (1973). Moon, Penderel. ed. Wavell: The Viceroy's Journal. Oxford University Press. p. 34. ISBN 978-0-19-211723-6. https://archive.org/details/wavellviceroysjo0000wave. 
  15. ↑ Alice L. George (2003). Awaiting Armageddon: How Americans Faced the Cuban Missile Crisis. The University of North Carolina Press. p. 78. ISBN 0807828289. https://archive.org/details/awaitingarmagedd0000geor. 
  16. ↑ Buder, Emily (19 March 2020). "The Great Toilet-Paper Shortage Scare – The Atlantic" (in en). https://www.theatlantic.com/video/index/608209/toilet-paper-shortage/. 
  17. ↑ Mamdouch G. Salameh, "Oil Crises, Historical Perspective" in Concise Encyclopedia of the History of Energy (ed. Cutler J. Cleveland: Elsevier, 2009), p. 196.
  18. ↑ Taylor, Peter (2013). The thirty-six stratagems: A modern-day interpretation of a strategy classic. Infinite Ideas. p. 50. ISBN 978-1-908474-97-1. https://books.google.com/books?id=TNW6s6u0EIQC&pg=PA50. 
  19. ↑ Roberts, Kevin (2005). Lovemarks: the future beyond brands. powerHouse Books. p. 193. ISBN 978-1-57687-534-6. https://books.google.com/books?id=xVefKsK9MtYC&pg=PA193. 
  20. ↑ Lohr, Steve (1 January 2000). "Technology and 2000 – Momentous Relief; Computers Prevail in First Hours of '00". New York Times. https://www.nytimes.com/2000/01/01/us/1-1-00-technology-2000-momentous-relief-computers-prevail-first-hours-00.html?pagewanted=all. 
  21. ↑ "The Millenium Bug threatens food supply systems – developing countries are also vulnerable, FAO warns". Food and Agriculture Organization. 19 April 1999. http://www.fao.org/News/1999/990302-e.htm. 
  22. ↑ "Oil and gold prices spike". 11 September 2001. https://money.cnn.com/2001/09/11/markets/oil/. 
  23. ↑ Ding, Huiling (2014). Rhetoric of a Global Epidemic: Transcultural Communication about SARS. Southern Illinois University Press. pp. 70, 72, 83, 103, 111. 
  24. ↑ Collins, Nick (25 August 2009). "EU ban on traditional lightbulbs prompts panic buying". The Telegraph. https://www.telegraph.co.uk/earth/energy/6082853/EU-ban-on-traditional-lightbulbs-prompts-panic-buying.html. 
  25. ↑ "UK fuel blockades tumble". BBC News. 14 September 2000. http://news.bbc.co.uk/1/hi/uk/924329.stm. 
  26. ↑ "Toxic leak threat to Chinese city". BBC News. 23 November 2005. http://news.bbc.co.uk/1/hi/world/asia-pacific/4462760.stm. 
  27. ↑ Kurtzleben, Danielle (1 July 2014). "Here's why the ammunition shortage went on for years". https://www.vox.com/2014/7/1/5845524/the-ammunition-shortage-is-a-real-thing-heres-why-it-happened. 
  28. ↑ Clifford, Stephanie (22 December 2012). "Shop Owners Report Rise in Firearm Sales as Buyers Fear Possible New Laws". New York Times. https://www.nytimes.com/2012/12/22/nyregion/gun-shop-owners-report-spike-in-sales-as-enthusiasts-fear-possible-new-laws.html. 
  29. ↑ Brochetto, Marilia; Botelho, Greg (12 September 2013). "Facing shortages, Venezuela takes over toilet paper factory". CNN. https://www.cnn.com/2013/09/21/world/americas/venezuela-toilet-paper/. 
  30. ↑ 30.0 30.1 30.2 Lezama Aranguren, Erick (9 November 2014). "La resaca del "dakazo", un año después". El Tiempo. http://eltiempo.com.ve/venezuela/situacion/la-resaca-del-dakazo-un-ano-despues/161509. 
  31. ↑ "Watch: Looting in Venezuela after government launches attack on 'bourgeois parasites'". EuroNews. 12 November 2013. http://www.euronews.com/2013/11/12/watch-looting-in-venezuela-after-government-launches-attack-on-bourgeois-paras/. 
  32. ↑ A weekend of panic buying has left many gas stations across the UK dry, CNBC
  33. ↑ Delvin, Megan (November 17, 2021). "Grocery stores running out of food in BC cities cut off by flooding (PHOTOS)". https://dailyhive.com/vancouver/grocery-stores-no-food-bc-flooding. 
  34. ↑ "Shoppers panic buy as IKEA shuts stores & factories in Russia". Yahoo Finance. March 7, 2022. https://uk.finance.yahoo.com/news/shoppers-panic-buy-ikea-shuts-162700033.html. 
  35. ↑ "Panic-buying up north as taps run dry" (in en). The Star. 16 May 2023. https://www.thestar.com.my/news/nation/2023/05/16/panic-buying-up-north-as-taps-run-dry. 
  36. ↑ "China shoppers panic-buying salt after Fukushima Daiichi treated water release | NHK WORLD-JAPAN News" (in en). https://www3.nhk.or.jp/nhkworld/en/news/20230825_30/. 
  37. ↑ "In China, Fukushima discharge met with bans, panic buying and wariness" (in en). 2023-08-25. https://www.tbsnews.net/world/china-fukushima-discharge-met-bans-panic-buying-and-wariness-688658. 
  38. ↑ What everyone's getting wrong about the toilet paper shortage Medium
  39. ↑ "Supermarkets report panic buying over coronavirus fears". 2020-03-03. https://insideretail.com.au/news/supermarkets-report-panic-buying-over-coronavirus-fears-202003. 
  40. ↑ Sirletti, Sonia; Remondini, Chiara; Lepido, Daniele (24 February 2020). "Virus Outbreak Drives Italians to Panic-Buying of Masks and Food". https://www.bloomberg.com/news/articles/2020-02-24/virus-outbreak-drives-italians-to-panic-buying-of-masks-and-food. 
  41. ↑ "The economics of the toilet paper panic—and why more stockpiling is inevitable". Macleans. https://www.macleans.ca/economy/economicanalysis/the-toilet-paper-panic-and-why-more-stockpiling-is-inevitable/. 
  42. ↑ "Virus panic buying prompts toilet paper rationing in Australia". CTVNews. 4 March 2020. https://www.ctvnews.ca/world/virus-panic-buying-prompts-toilet-paper-rationing-in-australia-1.4837956. 
  43. ↑ "Coles and Woolworths further limit toilet paper purchases as supply sells out in an hour". smh.com.au. 8 March 2020. https://www.smh.com.au/business/companies/coles-limits-toilet-paper-purchases-to-one-pack-per-person-20200308-p547xb.html. 
  44. ↑ "'It's crazy': Panic buying forces stores to limit purchases of toilet paper and masks". CNN. 6 March 2020. https://www.cnn.com/2020/03/06/business/coronavirus-global-panic-buying-toilet-paper/index.html. 
  45. ↑ Gadher, Dipesh (29 March 2020). "Every ration helps in coronavirus crisis: Tesco puts one-item limit on essentials". The Sunday Times. https://www.thetimes.co.uk/article/every-ration-helps-in-coronavirus-crisis-tesco-puts-one-item-limit-on-essentials-xcpv028kw. 
  46. ↑ Halliday, Josh (16 March 2020). "eBay urged to clamp down on coronavirus profiteering". The Guardian. https://www.theguardian.com/uk-news/2020/mar/16/ebay-urged-to-clamp-down-on-coronavirus-profiteering. 
  47. ↑ "Coronavirus price gouging: Amazon and eBay failing to tackle rip-off sellers, says Which?". Sky News. 25 March 2020. https://news.sky.com/story/coronavirus-price-gouging-amazon-and-ebay-failing-to-tackle-rip-off-sellers-says-which-11963229. 
  48. ↑ Nicas, Jack (14 March 2020). "He Has 17,700 Bottles of Hand Sanitizer and Nowhere to Sell Them". The New York Times. https://www.nytimes.com/2020/03/14/technology/coronavirus-purell-wipes-amazon-sellers.html. 
  49. ↑ Palmer, Annie (2 April 2020). "Amazon blocks sale of N95 masks to the public, begins offering supplies to hospitals". CNBC. https://www.cnbc.com/2020/04/02/amazon-blocks-sale-of-n95-masks-to-public-begins-supplying-hospitals.html. 
  50. ↑ "Transacting in Turbulent Times: The Impact of Coronavirus Across All Segments of the Self-Storage Industry" (in en). 2 April 2020. https://www.insideselfstorage.com/coronavirus-covid-19/transacting-turbulent-times-impact-coronavirus-across-all-segments-self-storage. 
  51. ↑ "Women charged after toilet paper row at Sydney Woolworths goes viral" (in en-AU). 2020-03-08. https://www.abc.net.au/news/2020-03-08/coronavirus-toilet-paper-fight-at-woolworths-leads-to-charges/12037046. 
  52. ↑ "'It's un-Australian, and it must stop': Scott Morrison tells Australians to cease panic buying" (in en). https://www.sbs.com.au/news/it-s-un-australian-and-it-must-stop-scott-morrison-tells-australians-to-cease-panic-buying. 
  53. ↑ Leung, Janni; Chung, Jack Yiu Chak; Tisdale, Calvert; Chiu, Vivian; Lim, Carmen C. W.; Chan, Gary (January 2021). "Anxiety and Panic Buying Behaviour during COVID-19 Pandemic—A Qualitative Analysis of Toilet Paper Hoarding Contents on Twitter" (in en). International Journal of Environmental Research and Public Health 18 (3): 1127. doi:10.3390/ijerph18031127. PMID 33514049. 



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