JUNE 29, 2020
The Australian AFP
Outbreaks of panic buying of toilet paper and pasta could occur again multiple times over the next 12 months as fresh waves of the coronavirus pandemic trigger more grocery hoarding, Macquarie Wealth Management has warned.
Its report noted a recent pick-up in grocery stockpiling in Melbourne and parts of Sydney, causing some shortages, and this could continue to happen as fears grow of more COVID-19 outbreaks.
“The latest illion/AlphaBeta data suggests supermarket sales are 3 per cent below normal levels …purchase limits were reinstated in Victoria earlier this week, as stockpiling behaviours began to materialise again, while on Thursday, Sydney was reported as beginning to see product shortages again,” the report noted.
“We expect this cycle could repeat itself multiple times in the next 12 months each time there is fear of another wave occurring. We expect the general eat-at-home trend to continue to play out in supermarket sales through the first half of 2021 as consumers remain cautious on spending money going out.”
Last week supermarket chains Woolworths and Coles were forced to reimpose buying restrictions in Victoria on a number of staple items such as toilet paper, paper towels, rice, UHT milk and mince. As as panic buying spread, they reinstated limited restrictions on groceries for the rest of Australia.
The stockpiling initially flared up in parts of Melbourne following a spike in COVID-19 infections, but the panic buying quickly spread to other parts of the city before Woolworths and Coles imposed purchasing limits in Victoria.
The move revived memories of panic buying when the coronavirus pandemic first appeared in March, when shoppers fought in the aisles over toilet paper and other grocery staples. At the time, Prime Minister Scott Morrison demanded an end to the hoarding, calling it “not helpful” and “disappointing”.
The Macquarie Wealth Management report also found that Australian consumers are continuing to upgrade electronics and home furnishings, with department stores also improving. There had also been reacceleration in consumer electronics sales in recent weeks as home office upgrades appeared to be picking up before the ends of the tax year. Beneficiaries include companies such as JB Hi-Fi and Harvey Norman.
However, questions remain about how sustainable this spending on consumer goods will be, especially as the JobKeeper wages program is set to end in late September.
“We think the materially elevated levels of growth we are seeing are unsustainable post September, but note with travel bans increasingly pushed out further, we think household holiday spend will at least partially continue to be redirected to homewares and home improvement, providing support for sales here,” the report said.