Panic buying causes disruptions in the retail chain which leads to higher prices. This was according to economist Professor Bonke Dumisa as retailers were at pains to discourage the practice.
Dumisa said primary producers had historical data on how much the total demand for their product was in the market.
“They plan their distribution and deliveries of their products based on this historical data. They calculate their selling prices on this historical data and their average variable costs.
“When panic buying takes place, this unnecessarily disrupts the supply chain, which in turn leads to embarrassing product shortages, which annoys both the middlemen and the mass retailers and mostly the end-users,” he said.
Dumisa said this as pictures of people bulk-buying goods and empty store shelves were widely shared on social media.
Retailers and warehouses had the problem that existing shelf space may not necessarily accommodate the additional volumes required of products and disrupted the space for other products which were not the target of panic buyers, he said.
“For example, the panic buying has resulted in toilet paper not being available at most retailers, while producers of toilet paper had not planned for this short-term production. This results in higher production costs, which will in turn result in higher selling prices to end- users, which in turn makes end-users accuse retailers of predatory pricing. This leaves everyone unhappy,” Dumisa said.
Refilwe Boikanyo, communications manager of Massmart, which owns Makro and Game stores, said they were enforcing limits on how much customers could buy. “We are mindful that stockpiling hurts the most vulnerable consumers in our society,” he said.
Boikanyo said their retail supply chain from manufacturers through to stores was under pressure where there was high demand. He said sanitisers and hygiene-related products associated with prevention of contracting Covid-19 were the most popular.
The Shoprite Group urged customers to buy only what they needed. Chief executive Pieter Engelbrecht said: “The gaps which are now evident on our shelves and those of other supermarkets are because of the unprecedented demand as a result of fear over the effect of the coronavirus, but we have new stock arriving regularly and we are working around the clock to keep shelves stocked… May I appeal to our customers to please think before they buy and only buy what their families need, so that others are not left without much-needed items. If we all shop as we normally do, our stores will soon return to normal and there will not be empty shelves,” he said.
Woolworths said they had experienced an increase in sales of certain hygiene and sanitising products online and was working to meet the demand.
Pick * Pay announced special shopping hours for people 65 and older – 7am to 8am. Retail executive: marketing John Bradshaw said their actions were focused on the well-being of customers.
“We know that the coronavirus is more of a threat to older people, and it is thus especially important that our older customers limit the number of times they’re in busy spaces as much as possible. This dedicated shopping hour for our elderly customers will give them exclusive use of the store,” he said.
As stores showed their goodwill, criminals were also waiting to take advantage of people during this trying time. Dr Johan Burger, a policing expert from the Institute for Security Studies, said criminals were good at exploiting opportunities like the current panic around coronavirus.
The SA Banking Risk Information Centre (Sabric) warned yesterday that cyber criminals were exploiting “Corona- mania” for their benefit. Sabric said criminals would con people by offering masks and vaccines from fake email ahey would ask for personal information like bank account details which they would use in fraudulent transactions.