“When governments impose lockdowns and restrictions with little to no notice, it makes life incredibly difficult for retailers,” Zahra told Inside Retail.
“The clarification came through a day later in terms of what was essential and non-essential retail – and even that is open to interpretation. It just goes to show that when some state governments announce these lockdowns, the impact on businesses is an afterthought.”
The rushed introduction of a mandatory Covid-safe sign-in process also took many retailers by surprise, with the start date moved forward by 10 days.
“We’re a year into Covid, and these communication breakdowns are still happening. It’s not good enough,” Zahra said.
“There needs to be a nationally consistent approach to Covid restrictions and lockdowns, with clear criteria on what the ‘trigger points’ are. At the moment, we’re at the whim of every state and territory leader as to how they might respond to new cases that emerge.”
As previous lockdowns have shown, the consumer response was to rush to supermarkets and stock up on essentials.
U Group & Co, a tech company that runs a national receipt panel, released a free live tracker this week to inform retailers of shoppers’ buying behaviour throughout the lockdown.
The platform, which studied 17,000 shoppers, showed an initial surge in grocery shopping trips following the announcement. Throughout the week, the basket size for “main groceries” increased 30 per cent on the week prior, there was a 270 per cent increase in toilet paper purchases and a 150 per cent lift in sales of long-life milk.
“After the announcement around 11am [Sunday], everything spiked with a higher percentage of people rushing out to the shops to buy from main grocery stores. That drove a spike in purchases of toilet paper, long-life milk and pet food,” U Group & Co. CEO Tyler Spooner told Inside Retail.
“We haven’t seen as much of an increase in trips to smaller, local retailers like IGA and local grocery stores, but we saw a big increase in basket [size]… When they go there, they are buying more stuff.”
Trips to pharmacies were also up significantly, with basket size increasing by 18 per cent.
“Looking at an omnichannel view of where consumers are shopping over the week. Pharmacy has risen from 2.5 per cent of consumers’ shopping trips over the week to 5.3 per cent.”
Woolworths and Coles reacted quickly, imposing purchase limits on high-demand items such as toilet paper, hand sanitiser, rice, pasta, meat and canned food. And by Tuesday, the number of shopping trips were starting to regulate.
Coles added extra team members in stores and expanded the capacity of Coles Online in response to increased demand. Both supermarket giants pleaded with customers to only buy what they need.
“We encourage everyone to continue shopping as they usually would and only buy what they need,” Karl Weber, GM at Woolworths West Australia, said in a statement.
Dr Jason Pallant, a consumer behaviour expert at Swinburne University of Technology, told Inside Retail that while panic buying seems like an irrational behaviour, there are a few psychological processes happening.
“In part, it’s a response to the uncertainty and anxiety that lockdowns cause,” Pallant explained. “Faced with that anxiety, consumers can be drawn to ‘take control’ where they can, even if that just means stocking up on toilet paper.”
“Then there is a scarcity effect. As consumers see reports or social media posts reporting low stock of home essentials, they can be motivated to stock up themselves to avoid missing out. So there’s no clear cut reason that any individual may be ‘panic buying’. It’s a complex mix of feelings and personal situations.”
Both Spooner and Pallant believe that supermarket and grocery retailers are now better equipped to deal with these spikes in demand.
However, Pallant stressed that there needs to be better communication and support from government to help retailers manage during lockdown periods.
“I am sure retailers would prefer more warning when lockdowns may be coming. It’s a big ask to immediately change processes in response to events as they happen,” he said.
He believes that there needs to be more manageable solutions in place to prevent panic buying and the resulting strain on retailers and distribution networks.
“For retailers, it will be about being flexible and quick to adapt as situations change. For governments, it will be about thinking through how to manage and communicate necessary lockdowns in a way that doesn’t lead to panic and anxiety among consumers.”