The panic buying isn’t getting any better. In fact, it’s getting worse. Letters of reassurance from supermarket bosses have fallen on deaf ears as the nation stocks up with frozen, ambient and fresh food alike. Not to mention loo rolls, paracetamol and hand sanitiser. In fact, one store manager I spoke to said he was delighted that stock, which had been gathering dust for months and was fast approaching its sell-by date, had been cleared as desperate shoppers grabbed every last morsel of food they could find on the shelves.
As a result, the supermarkets are making a real killing. As I said last week, they’re doing a great job, and it’s tough work meeting the demand, especially if you’re on the front line, with shoppers demanding and sometimes rude, and stock flying off the shelves no sooner than it’s replenished.
But I’m not feeling sorry for the supermarkets right now. Christmas hasn’t just come early. So strong is demand, there’s no need for promotions: Ocado and Tesco have already scrapped them, with the latter asking suppliers on Thursday to fund an EDLP position for the next six weeks. Under the terms of the Chancellor’s £330bn Emergency Budget this week, they’re even being given a business rates holiday. There are surely more deserving cases than them right now.
Suppliers for one. Sure, some are ramping up production and enjoying a huge boom in sales. But even then it places a strain on cashflow. And right now cash is more important than ever, as the market witnesses huge swings. What’s more, there are many suppliers who are likely to lose listings as supply chains are simplified, including startups and challenger brands, which are too awkward and fiddly to deal with in these insanely busy times. Then there are the suppliers, and wholesalers, whose business is on the foodservice side. As fast as some are trying to pivot to fulfil the increased demand in the take-home sector, it’s inevitable that many others will go under.
Of course, the supermarkets won’t enjoy some of the more lucrative (and joyful) occasions in the coming months that they would normally expect. Mothering Sunday plans and Easter plans are being scrapped. The cancellation of sporting occasions will put a dent in party food and even booze sales. It will be a sober time for all shoppers, not a quiet one. Supermarkets are also exposed to the travel retail and food to go markets. But the supermarkets are the lucky ones. Imagine being a pub group, or a restaurant chain (or supplier thereof), or a fashion retailer or an airline. These are grim times, and the supermarkets have much to be grateful for.
To their credit, supermarket bosses have been responding not only to the demand, but to the grave social injustices brought about by panic buying, and taking measures to prevent stockpiling, while insisting there is enough food in the system if everyone shows restraint. But they’ve not done enough to explain why and how supply chains are still able to work, given the lockdown and travel bans here and abroad.
It’s also their assumption that, once cupboards are stocked up and (newly bought) freezers are full, the situation will calm down. But it’s not all panic buying. What we are witnessing is a cataclysmic change in consumption patterns, from out of home to take-home, as workers and children are made to stay at home.
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