Panic buying may have boosted grocery sales in February - StatsNZ

Across the world there's been a strange rush to buy toilet paper. Photo / Getty Images

The coronavirus effect appears to be changing consumer behaviour with latest statistics showing a sharp rise in grocery buying in February, while spending in restaurants and cafes fell.

Retail card sales rose in February with more spent on groceries and long-lasting goods like furniture, hardware and appliances, Statistics NZ said today.

Total retail card spending was up 0.6 per cent in February, when adjusted for seasonal effects, after a 0.2 per cent fall in January.

"Although we have seen a lift in sales in February, we can't identify at what point during the month this occurred. It's possible that increases in supermarket sales resulted from concerns around Covid-19," retail statistics manager Sue Chapman said.

Some items such as hand sanitiser, masks, gloves and paracetamol have been hit by short-term shortages due to high demand and some supply issues in the past few weeks.

The closure of factories in China has also started to cause supply problems for some New Zealand manufacturers which are running short of components.

But major supermarket chains have offered reassurances about supply lines of basic items.

For example there are no structural supply issues for products like toilet paper.

Cottonsoft, one of the country's largest makers and distributors of tissue products, this week confirmed it faced no supply issues with any raw materials.

It has however upped its production of toilet paper to meet higher than usual demand.

In Australia panic buying of toilet paper has seen shelves emptied and even resulted in fights between shoppers.

StatsNZ figures showed the largest increase in sales was for grocery food and drink (consumables), up $51 million (2.4 per cent), followed by an increase in sales of long-lasting products like furniture, hardware, and appliances (durables), up $12m (0.8 per cent).

"This is the largest dollar value increase in grocery sales since March 2018, when Good Friday fell at the end of the month," Chapman said.

Vehicles, fuel, and apparel were all relatively unchanged compared with January.

But eating and drinking at places like restaurants, cafes, and bars (hospitality), fell $8.5m (0.8 per cent).

This was the second month in a row where spending in hospitality dipped.

"There has been a drop in weekly visitor arrivals from China as a result of the travel ban being implemented at the start of February," Chapman said.

The Government has warned the public not to stockpile goods. Last week the Prime Minister weighed in on the issue, telling people to continue with everyday life.

"If you need a bottle of milk, go and get it. If you don't, do not react in any other way than you would any other day," she said.

"The public should be going about their daily lives."

Panic buying is a mass psychological phenomenon that has been well documented and studied by psychologists and economists.

A professor of organisational behaviour, Andy J. Yap, makes the case that panic buying is a response to loss of control.

Yap - who also co-authored a 2016 academic paper called Control Deprivation Motivates Acquisition of Utilitarian Products – says we buy basic household items because we psychologically associate them with problem solving.