‘No need to stockpile’ say retailers

Local chains ask consumers to buy only what they need.
The level of panic buying may be alarming, but the boost to sales is a welcome surprise for a sector that had been taking strain. Image: Moneyweb

South Africa’s three largest retail chains – Shoprite, Pick n Pay and Massmart – are calling on the public not to ‘panic buy’ in response to concerns over the possible impact of the Covid-19 outbreak.

The plea comes after many stores saw their shelves cleared of meat products, long-life milk, toilet paper, sanitisers and related hygiene products by stockpiling consumers on Monday and Tuesday following President Cyril Ramaphosa’s declaration of a national disaster as a way to control the virus on Sunday.

Read: Ramaphosa addresses the nation on Covid-19

The declaration prohibits gatherings of more than 100 people and restricts travel from the UK, Italy, Iran, South Korea, Germany, Spain, China and the US. Schools will be closed from Wednesday until the end of the Easter holidays.

The declaration made no mention of possible product shortages, but this did not stop consumers from wanting to stockpile.

Only what you need

The country’s largest retailer, Shoprite, is appealing to customers to “only buy what they need”. It has assured customers that it is doing everything in its power to restock shelves as quickly as possible and ensure that warehouses have stock available.

“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,” says Shoprite Group CEO Pieter Engelbrecht.

“We have also increased orders, are sourcing new and additional suppliers, and our warehouses have sufficient stock to replenish our store shelves.

‘Unprecedented demand’

“The unprecedented demand has made it difficult to eliminate gaps immediately on the shelves but we are working tirelessly to fill those shelves as quickly as possible from our warehouses.

“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,” says Engelbrecht.

There was a similar appeal from rival Pick n Pay:

“We would like to encourage our customers to continue shopping responsibly. Where stocks are temporarily low due to heavy customer demand, we will be limiting the number of certain products per customer.”

This was echoed by Massmart. “We are mindful that stockpiling hurts the most vulnerable consumers in our society and do not see a need for this type of buying behaviour,” says Massmart communication manager Refilwe Boikanyo.

Massmart’s big-box retailer, Makro and Woolworths, are now enforcing customer limits at its store.

Clicks chief commercial officer Rachel Wrigglesworth says the health and beauty chain is also limiting sales on some products and has “significantly” increased orders across all high-demand categories. It has also increased the number of deliveries made to its stores.

PnP saw it coming

Pick n Pay, however, makes the point that customers, on the whole, have been buying responsibly and generally only stocking up on what they usually buy.

It points out that it has been preparing for Covid-19 “for some weeks” and has been working closely with its suppliers to make sure it has sufficient stock in its stores.

It said consumers who want security of supply should consider shopping online. “Our online service is operating effectively and we have seen an increase in online purchasing over the past 10 days. Our technology systems are more than able to cope with increased activity online.”

Read: How much could Covid-19 impact the SA economy?

Needed boost

The retailers may not be fond of how some consumers are panic buying, but this boost to sales comes as a welcome surprise to a sector that has taken strain over the past two years.

Lower-than-inflation wage increases, higher municipal levies and increasing fuel prices have all taken their toll on the spending power of consumers.

The sudden spending surge is certain to have brought some relief, but by how much, retailers are not saying.

Massmart says it does not comment on sales performance outside JSE listing requirement protocols, and Pick n Pay, Woolworths and Shoprite did not answer questions on how the stockpiling is affecting overall sales.

 

Big three retailers

 

 

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This stocking up can lead to conflict. At the shelves and at the tills.
We will fight each other in the Isles.

For once we must act like our politicians. Consume as much and as quickly as we can and “good luck” to the poor and needy. SA is not a first world country, there is no safety net here…each man for himself and god for all of us.

I seriously hope you were saying that tongue in cheek?

“If you can keep your head when all about you
Are losing theirs and blaming it on you,

If you can meet with Triumph and Disaster
And treat those two impostors just the same;

If you can talk with crowds and keep your virtue,
Or walk with Kings—nor lose the common touch,
If neither foes nor loving friends can hurt you,
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,
And—which is more—you’ll be a Man, my son!”
– RUDYARD KIPLING

This kind of behavior is temporary new normal. We can’t stop people from panicking, after all it’s their money. The supply chains must be jerked up. Business must not behave like Eskom. Don’t discourage or punish the consumer from using your product. This business boon may never be realized in a very long time again. Employ more people run production lines 24/7… be creative, have more delivery fleet on the roads… Banks extend credit, SARB reduce interest rates. Let the economic machine fire on all cylinders. THESE TIMES MY NEVER RETURN FOR BUSINESS IN OUR LIFETIME… Let’s be positive.

Each and every business model that was built around the soccer world cup is bankrupt today. You cannot invest capital in a once-off event, nor can you invest in irrationality.

Past failures does not surely guarantee failures in the future, especially in non-related circumstances.

This is the secret of the capitalist system- a new fool is born every minute. On the other hand – the entrepreneur sees opportunity where others see problems. Maybe you are the entrepreneur and I am the fool.

Boombang absolutely correct. Basic economics 101. Most producers are price takers in what is close to a “pure competition” economic model. What this means is that they will carry on producing toilet paper or macaroni until their marginal cost (MC) equals their marginal revenue (MR) and total average cost (TAC). The supply and demand are in economic equilibrium. Now along comes the Corona Virus. Demand has increased. One may point out that these people are acting irrationally buying stuff they don’t need now, but that does not matter. By rationing goods you are merely sending the signal to the consumer that there is a shortage and the price is too low. This creates a culture of round tripping where mum, data and kinds all go the separate tills, and ultimately a black market. Shades of the Soviet Union.

When producers run out of stock, the solution is to raise the price. Now suddenly the retailer and consumer must pay more. The producer will produce more until the marginal revenue equals the marginal cost at greater quantity. The supply demand equilibrium will shift to higher prices and higher quantities. Toilet paper is once again available. However, this is not sustainable. The cure for the high prices are high prices. Gradually it all shifts back to the old equilibrium and hoarders get burned with expensive products for which they have no immediate use.

I need to get beer and tomatoes today, thats all.

… bugger the tomatoes

Guess its a form of “social distancing”.

Go to the shop once and get enough for a long time.

Can you see why your caring retailer has your interests at heart? or do they prefer their operations not be disturbed to much. If they don’t have enough maybe you go elsewhere and that could affect the bottom line???

Retailers!!!!????

This is the same retailers that are sending letter of demand to their suppliers asking them for detailed contingency plans about how factories/suppliers will maintain production and stock ….Mr PnP/SAB/etc etc if there were no risk why send out your arrogant letter ??

When all thes helves are empty, i will walk in there, buy a packet of popcorn, and watch for movie to play out

…or buy that very shelf.

the irony here is, people eating meat break down their immunity system!

The fact that the Karoo is populated with healthy farmers and farm workers proves you wrong. It is the other way around. People who do not eat meat suffer from a compromised immune system. A healthy immune system depends on a healthy, optimal balance of vitamins and minerals. Iron absorption depends on heme levels. Calcium absorption depends on Vit C levels. Zink absorption depends on Vit C levels. Vit C levels depend on iron levels. Red meat is the only source of heme.

But all of that is irrelevant – the thing is- we were born with canine teeth.

sensei, and the hospitals are filled with vegetarians? 🙂

“The reason humans have sharp front teeth isn’t for tearing meat. Humans have sharp front teeth called canines, just like lions, hippos, and other mammals. Contrary to popular belief, human canines are not for tearing and ripping meat. Instead, our ancestors used them to fight male rivals for mating rights.”
Source: Business Insider

Stop smoking whatever it is that gives you these bizarre ideas.

@mj- agree with griet- stop smoking your vegetarian leftovers and eat some healthy food.

@Sensei…
With due respect, there is no fool in these matters. Your Opinion is warranted equally as mine. Opportunities come in very mysterious guises, our economy is busy shedding jobs… The virus, as inconvenient as it may be, on the other hand can help in many un-intended ways and means in keeping business busy while it lasts. Manufacturing in consumables, food stuff, health and medication,transportation, cellphone & electronic communication, home entertainment(Netflix) online gaming, online shopping etc,etc should see a boon that never was in the past. Let us employ more people even if it is temporary… Let the country work on all cylinders.

I respect and appreciate your opinion. This is a conversation, not a skirmish. I am a patriot. I want this country to succeed. I have compassion and respect for my compatriots.

So uncivilised.Everyone for themselves.

Making the poor poorer and the rich richer

“We are mindful that stockpiling hurts the most vulnerable consumers in our society and do not see a need for this type of buying behaviour,” says Massmart communication manager Refilwe Boikanyo.

You and your management team are the last to give moral guidance.

Wife thought I was crazy to start stocking-up 3 weeks ago. I’m not scared that retailers will run out. I’m scared I’ll be limited to my house for a month.

End of comments.

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