Supply chain concerns and worries about low product levels have kept American customers from shopping in low quantities, just as they did in the early days of the epidemic.
According to the Wall Street Journal, last year’s fourth-quarter sales of home products increased 26.6 percent in dollars and 18 percent in volume.
'Shopping malls are full, people go to work… they've already lived through eight years of war, it's not new.'
— LBC (@LBC) January 29, 2022
The Fear of Not Having Enough
According to the Journal, the International Research Institute discovered “the average annual increase in sales by quantity of food and drinks was 3% in 2020 and 2021. This is contrasting with just a 0.5% annual growth rate for the past ten years.”
Customer demand for larger product sizes is also increasing. According to IRI estimates, the average volume per unit increased by 2.1% last year, compared to average sizes in 2019.
Although IRI expects consumption to fall this year compared to last, it says residential product and food intake will still be twice what it was before the COVID-19 epidemic.
Because people are used to working from home and flexible work, it’s safe to assume even if COVID disappeared tomorrow, individuals would continue to use it at home, according to Krishnakumar Davey, head of client management at IRI.
In our latest interview, Krishnakumar (KK) Davey, IRI’s President of Client Engagement, explains how private brands are gaining share in high-inflation categories like meat and frozen foods. Watch: https://t.co/2f09ZuKM2z #privatelabel #iri #inflation #supermarket #groceries pic.twitter.com/CGhxuVDht0
— PLManufacturers Assn (@PLMA_USA) January 26, 2022
Omicron caused item limitations and supply chain challenges, perhaps increasing customer demand to stockpile certain things.
As reported by the Journal, Ayelet Fishbach (professor of behavioral psychology and marketing at the University of Chicago Booth School of Business) stated, “the price of underconsumption seems to be larger than the cost of overconsumption from a psychological standpoint.”
“Having an extra box of cereal left over and needing to throw it in the bin is more upsetting to us than not receiving our cereal box.”
Rises in Grocery Bills
For the week ending on January 30th, IRI reported that food and beverage goods were 85% stocked.
Pre-pandemic stock levels were 93%-95%. According to the Journal, sports beverages (77%) were out of stock, as were frozen baked items (79%) and frozen snacks (81%).
Some bulk-purchasing firms have changed their retention efforts, due to changing buying trends.
Megan Crozier, Sam’s chief merchant, says while Sam’s Club membership numbers reached a new high in the third quarter of 2021, the most recent members are young families.
The firm chose to change certain goods, expand its app, and provide grocery pickup.
The poll by Clever, which was mentioned in a recent post published by Nasdaq, revealed 33% of elderly Americans are having difficulties paying their grocery bills.
One of Nasdaq’s grocery shopping tips for retirees was to buy in quantity. However, the article emphasized customers should be cautious about their stockpiles. The appliance industry, for instance, has seen a trend in purchasing.
According to the Association of Home Appliance Manufacturers, sales of chest freezers increased from 768,600 in 2019 to 1.714 million in 2018. Refrigerator sales grew to 12.8 million units in 2021 from 11.1 million in 2019.
According to the Journal, consumers who encountered the painful realities of pandemic shortages made irreversible adjustments. Then, instinctively, they said, ‘That won’t happen to me again,’ and stocked up the next week.