When the coronavirus pandemic struck the nation two months ago, panicked customers stockpiled paper goods, shelf-stable foods and other essentials as states shut down.
Shelves that once held toilet paper, aloe vera, hand sanitizer and antibacterial wipes went empty as soon as they were stocked.
But that’s all changed.
Shoppers are making more trips to dollar stores, stocking up on store brands and bypassing snacks and sodas at convenience stores, according to a CNBC report that cited IRI, the Chicago-based data and analytics provider reported.
Sales of store brands, so-called private labels, which are priced lower than national brands, have surged during the pandemic. Private-label sales were up nearly 19 percent over the four-week period that ended on May 3 compared with a year ago, IRI found, according to CNBC.
“As this drags on, you are going to see a lot more recessionary behavior coming up,” Krishnakumar Davey, president of strategic analytics at IRI, told CNBC. “We are just seeing the beginnings of it.”
During the 2008-2009 recession, shoppers watched spending by buying smaller packages in contrast to today’s shoppers’ who are making fewer shopping trips but leave the store with bigger baskets, Davey told the network.
“There’s a lot more of a hunkering down and spending only on what you need,” Davey said.
The reason for the shift from panic buying to discount shopping may have something to do with bleak economic news.
Last week, PYMNTS reported nonfarm jobs fell by 20.5 million in April as the unemployment rate swelled to 14.7 percent, up from a 50-year low of 3.5 percent in February, reflecting the damage caused by coronavirus pandemic. That number is the highest rate and the largest over-the-month increase dating back to 1948.
The numbers have impacted even those who still have jobs as they see neighbors, family or friends get furloughed or laid off, CNBC reported.
All of those factors, Davey told the outlet, have an effect on the psychology of the consumer and can remain in shoppers’ minds as they scan store shelves or buy online.
One-third of consumers surveyed by McKinsey & Co. in late April and early May told researchers their income has taken a hit because of the coronavirus and nearly half of all of those surveyed said they are pinching pennies and looking for deals, according to CNBC. About 50 percent said they have to be very careful about how they spend money.
“In the past recessions, people were just concerned about money,” Davey told the network. “In this recession, people are concerned about money and their health.”