Will We See a Second Wave of Panic Buying?
When you’ve been out grocery shopping at your local store, you’ve probably noticed that some items are still out of stock. On my bi-weekly grocery trip, I have to go to multiple stores to get everything I need, when pre-COVID, I would only have to go to one store. I still can’t get some cleaning supplies that I’ve been looking for.
The beginning of the coronavirus pandemic brought on the panic buying of essential items like cleaning supplies, bread, milk, and canned goods. Over the last few months, the shelves of grocery stores have slowly started to fill again. It was a glorious day when I could go to my local Safeway and grab a pack of toilet paper. By that time, there were per-customer limits on items like toiletries and cleaning products.
Well, just as we thought things were returning to normal — at least for grocery stores — the panic buying is set to pick back up. According to data from Johns Hopkins University, at least 31 states reported a record-high day of new coronavirus cases in October, and nearly 50,000 Americans are currently hospitalized with the virus. Experts are warning the public that these statistics could get a lot worse and urging Americans to be safe and cautious. According to the Washington Post, Dr. Deborah Birx, one of the White House’s most senior coronavirus advisers, had this to say in an internal memo on November 2:
We are entering the most concerning and most deadly phase of this pandemic… leading to increasing mortality. This is not about lockdowns — it hasn’t been about lockdowns since March or April. It’s about an aggressive balanced approach that is not being implemented.
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Some of the numbers that have been reported in the past few weeks are a lot higher than they were in March. The slight difference this time around is that more people understand how serious the virus is and health care workers and institutions are more prepared. Unfortunately, they are also worn down. They’ve been dealing with the virus since March. Of course, people have pandemic fatigue, but with more European countries opting to return to lockdown, Americans could be looking at the same fate.
However, this time around, food makers could be a little more prepared. General Mills (NYSE: GIS), the cereal company that also makes Annie’s boxed mac and cheese, has added 45 external production lines since the spring when grocery stores couldn’t keep items on the shelves. The famous soup company Campbell Soup Co. (NYSE: CPB) has also bumped up its production efforts. It has spent $40 million to expand its productions of Goldfish crackers and is currently building up the capacity of its chip brands like Cape Cod. This is just a sliver of how the food industry is gearing up for another pantry surge.
People who are afraid of going into another lockdown are going to panic buy shelf-stable items, and America’s food makers don’t want to be in the same position they were in at the beginning of the pandemic because those were lost sales. If there were enough products and supplies to keep grocery stores stocked, then that would mean a lot more sales for companies like General Mills and Campbell Soup Co. These companies had the advantage of a summer that allowed them to reassess their situations and find better strategies to make sure what happened in the earlier months of the pandemic wouldn’t happen again.
Centricity is a platform that tracks online activity like searches and e-commerce, and its CEO Mike Brackett had this to say about recent weeks: “In the last three to four weeks, we’ve seen very drastic increases, similar to how we did with the first wave of the pandemic.” Mix in the upcoming holiday season, which has always brought on the demand for staple holiday foods, and overall demand is set to soar. Analysts expect the stock up will occur around 10–14 days prior to Thanksgiving, so be on the lookout for that. Also, be on the lookout for how some of these American food makers perform in the weeks preceding the holiday and during the expected stock up period.
Until next time,
