Needless to say, these aren’t normal times, as some supermarkets are emptied of toilet paper, rice, flour and other staples. Nevertheless, pandemic panic consumption shortly will be a distant memory. The recent grocery cart frenzy will seem pointless.
Needless to say, these aren’t normal times, as some supermarkets are emptied of toilet paper, rice, flour and other staples. Nevertheless, pandemic panic consumption shortly will be a distant memory. The recent grocery cart frenzy will seem pointless.
“All the grocery stores are going to have pallets of toilet paper sitting in the aisles, and nobody is going to buy it, because who needs to buy toilet paper when you’ve got a year’s worth sitting in your garage?” Daniel Stanton, a supply chain expert, recently told CNBC. “The U.S. produces a huge amount of food. We’re also an exporter of food, so we’re going to be OK,” he said.
Retailers are stepping up to meet the needs of U.S. households.
Amazon, Walmart, Lowes and other retailers announced plans to hire hundreds of thousands more warehouse and delivery workers. Target and eight other major retailers gave employees a temporary pay bump as an incentive to face the perils and fatigue of keeping shelves stocked and checkout lines moving.
That said, widespread shortages of consumer staples in recent weeks reveal the shortcomings of market assumptions that don’t apply in times of trouble. While household goods are being restocked, two forces work against uninterrupted supplies of big-ticket items.
First, supply chains that extend for thousands of miles make U.S. factories dependent on all manner of parts and materials made from as far away as China, Taiwan, South Korea and Malaysia. With the course of the pandemic’s spread unclear, so will be the reliability of foreign vendors.
The second is the likely shortage of inventory. Where factory warehouses once brimmed with enough goods and components to last for months, today inventories are designed to be depleted in as little as 30-60 days.
For the time being, however, transitory shortages won’t rise to the level of emergency. In the midst of a recession that threatens to put millions of Americans out of work, shopping for new cars, fancier iPhones or stylish refrigerators won’t be an urgent impulse for some time to come.
— Star Tribune (Minneapolis)
