COVID-19

Grocers are scrambling to face another pandemic panic

Kristin Schwab Sep 28, 2020
Heard on: Marketplace
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People keep social distance as they line up in front of a supermarket in New York City. Johannes Eisele/AFP via Getty Images
COVID-19

Grocers are scrambling to face another pandemic panic

Kristin Schwab Sep 28, 2020
People keep social distance as they line up in front of a supermarket in New York City. Johannes Eisele/AFP via Getty Images
HTML EMBED:
COPY

Remember the early days of the pandemic? Back when panic buying meant it was nearly impossible to find things like toilet paper, rice and flour? Well, public health officials are warning that we could see a second wave of the virus before the end of the year. And this time retailers want to be prepared if there’s high demand for certain products.

But that’s thrown all the computer models they usually use out of whack. Machine learning helps run stores like Walmart and Kroger, and that’s not as useful during a pandemic.

When you pick up orange juice or granola bars at the grocery store, you are being watched. Video cameras and even retinal scanners are looking at where your eyes go, how long you linger and what you touch. 

“If it can be measured through technology and money can be made, and of course it’s legal and ethical, it will happen,” said Eric Bradlow, who teaches retail analytics at Wharton. He said algorithms use all that data to decide how much to order and what the sticker price should be. And that works in normal times.

“Now the question is: How predictive is that model going to be?” Bradlow said.

Not so predictive. Because a data model is only as good as its data, and computers don’t know how to factor in people’s unusual buying patterns during the pandemic. Rudi Leuschner, a professor of supply chain management at Rutgers, said retailers are going old-school.

“We use the supercomputer that everybody has built in right as they’re born, which is human intuition,” Leuschner said.

People’s shopping habits have ebbed and flowed depending on the state of COVID-19 cases or lockdowns. Computers can’t make sense of this stuff, so retailers have to trust their own guts.

“It is definitely going to come down to a lot of calculated best guesses,” said Julie Niederhoff, who teaches supply chain management at Syracuse University.

She said humans tend to overcorrect. Retailers may actually stock up too much, wasting money and warehouse space. Plus, who knows what people will panic buy the second time around.

COVID-19 Economy FAQs

New COVID-19 cases and deaths in the U.S. are on the rise. How are Americans reacting?

Johns Hopkins University reports the seven-day average of new cases hit 68,767 on Sunday  — a record — eclipsing the previous record hit in late July during the second, summer wave of infection. A funny thing is happening with consumers though: Even as COVID-19 cases rise, Americans don’t appear to be shying away from stepping indoors to shop or eat or exercise. Morning Consult asked consumers how comfortable they feel going out to eat, to the shopping mall or on a vacation. And their willingness has been rising. Surveys find consumers’ attitudes vary by age and income, and by political affiliation, said Chris Jackson, who heads up polling at Ipsos.

How many people are flying? Has traveled picked up?

Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

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