COVID effect or Panic Buying? Demand or Supply? How will the festive season play out?

October 6, 2021

COVID effect or Panic Buying? Demand or Supply? How will the festive season play out? 

Logistics professionals are fully aware of the continuous disruptions since the COVID pandemic swept across the world, but when supply chain news hits the front pages of our international newspapers, all of a sudden, logistics peaks a whole new level of appreciation by end consumers. Empty shelves speak volumes. 

In the lead-up to the festive season, retailers far and wide are challenged with getting their goods into stores at the right time, in the right place at the right cost. These are the simplistic metrics used to measure a reliable supply chain.

But there is nothing simple about supply nor demand in COVID times. 

Consumer spending this coming festive season is reported with some optimism since vaccination rates continue to increase globally and the return to ‘normality’ post-COVID appears more imminent. Both Thanksgiving and Christmas in 2021 may be a very different event to the previous year. 

This festive season may allow for more interaction than the socially distanced/lockdown trend of Christmas 2020. Retailers are looking into scenario planning to analyze what sales may look like for the 2021 holiday season. There is already talk of a Christmas Tree shortage and toy makers are acting with a sense of urgency to ensure toys are on the shelves in time for Christmas.

How will a family gathering this season compare to the low-key festivities of 2020? Will the cash saved from staying at home during the ‘stay at home’ period be frivolously spent on the main event when families are reunited with their loved ones? 

Increasingly poignant as supply challenges continue to evolve may be the impact of empty shelves and supply shortages. Lack of supply could spark panic buying for the latest gifts following the trend we endured in 2020 when multiple goods disappeared from stores across the country. 

Newspaper headlines CoronavirusThe media plays a vital role in the perception of the availability of goods. What are they reporting, and how will those reports impact consumer buying behavior? Are inventories at sufficient levels to sustain the panic buying impact? Panic buying can create turmoil, not only in retail, the lack of petroleum product in gas stations in the United Kingdom is a recent example. 

Planning ahead is complex with an unpredictable consumer, yet supply solutions must be provided to ensure the availability of the retail products everyone is expecting under the Christmas tree.  

The troublesome supply issues relate not only to the global impact of COVID, such as port closures in Asia, limited supply of containers, air freight capacity as well as port congestion but also a highly reported driver shortage both in Europe and in the United States.  

The push and the pull of supply and demand is heavily impacting global retail supply chains; predictability is perhaps a pre-COVID term. 

In a recent interview with The Loadstar, Ewan Alexander, Global Vice President, Consumer Retail at Crane Worldwide commented:

"In Europe we’re going to see some panic-buying, not just with fuel, as we lead up to this festive period, we’re undoubtedly going to see this also in the US. Trucking capacity is undermined by the driver shortage. From Asia to Europe, rail has been a viable option, but recent disruptions there have stretched transit times beyond 45 days, a far cry from the 17- to 25-day window shippers have been used to". 

As peak season commences and supply chain disruption continues, our retail logistics experts at Crane Worldwide Logistics continue to partner with our clients to provide market information and trends in the logistics market. In addition, we have charter options from China to the United States available on a weekly basis. Around the world, the Crane Worldwide team are working side by side with our clients to provide solutions with a sense of urgency.

As our clients begin to evaluate their supply chain efficiency not just in the current climate but in the long term, we provide a partnership approach to determine the most efficient and effective way forward. If you would like to discuss your challenges and learn more about our capabilities, don’t hesitate to reach out.

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19th March, 2020

Why is everyone buying toilet paper?

Around the world, it has been widely reported that panic buying is emptying shelves in stores. Due to the impact of the Coronavirus COVID-19 and potential quarantine periods, consumers, heavily weighing in with anxiety, have begun to stockpile and hoard essential items for their household. The self-isolation period for people who may have been exposed to the COVID-19 virus is currently recommended to be fourteen days at home with no external contact, including trips to the local supermarkets. Lockdown has already begun in some countries including Spain, France, Italy and the United Kingdom, and panic buying of essential food and supplies has been noted to be escalating. With the increase in Coronavirus cases in the United States of America, we see further panic buying developing into a major problem, as households prepare to be home, children home schooling and adults working from home for an extended period of time.

Considered by many as an overreaction to the current Coronavirus epidemic, panic buying has led to mass shortages of essential food and products on shelves, hoarding of essential supplies such as medicines and toilet paper has been widely reported in the news. Food supplies are being limited by many convenience stores, supermarkets, grocery stores, pharmacies and home delivery is also coming to a halt. The impact of panic buying has created long queues at stores, which only intensifies the perception that shortages will occur. Business processes are being tested by this unforeseen demand and it is impacting the whole supply chain for some organizations. 

How does panic buying impact the supply chain?

Some retailers are already struggling with regular sourcing of supplies from manufacturers, notably China, due to the factory shutdowns that occurred over the extended lunar new year holidays, even though factories are reportedly now back to normal levels. The time-lapse for the transportation of goods from China has hit retailers recently as stocks have not yet been replenished to full inventory levels. It may take several weeks before essential goods and products are back to normal levels. Logistics management will be a key focus area and leveling out the 'bullwhip' effect of high consumer demand will take time. Predicting demand flows of products in these unprecedented times is proving difficult.

The increase in demand for essential items, due to anxious panic buying and people panicking, is putting further pressure on inventory levels. Efficient supply chains won't leave shelves empty for extended periods, but the strain on supply chains is evident as non-forecasted levels of demand continue to rise and shortages are becoming apparent to the end consumer. 

How long will panic buying last?

That is the question that many supply chain managers are contemplating. It is unknown how long the Coronavirus will continue to spread, and every day different countries are reporting scenarios that remain uncertain for the time being, with differing approaches to contain the virus. However, in the majority of cases, smart supply chains can cope with fluctuating supply and demand. With intelligent supply chain visibility tools, gaps in inventory can easily be identified. The question, however, is how quickly can supply shortages be fulfilled and will transportation be available to get products in the right place at the right time for the right price?

As quarantine periods and self-isolation continue, will other parts of the world have issues such as truck driver shortage or limited air freight capacity as we have previously seen in China?

Supply chain resilience will continue to be tested over the forthcoming months during this period of uncertainty. Second waves of Coronavirus are possible, consumers may well revert to panic buying in the case there is an increase in COVID-19 that resurfaces. 

At this time, Crane Worldwide Logistics continues to work in partnership with our clients offering air freightocean freight, and rail freight services (China - Europe) to minimize additional costs in the supply chain. We recognize that space is a priority and charters are also available to ensure additional capacity is available for our clients when they need it the most, reach out if we can help! Around the world, we are supporting the life sciences and retail supply chains to ensure support at this more about the vital role that we are playing as part of the critical infrastructure support at this time here.

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