COVID-19 outbreak leads to panicky customers flooding supermarkets in Asia

COVID-19 coronavirus outbreak has already spread globally after making its initial impact on China and neighbouring markets like South Korea, Japan, Hong Kong, Singapore, Malaysia and other ASEAN countries.
With the rapid spread of the disease affecting almost half a million people, consumers are bracing for tougher challenges ahead as major economic players like the US and China already predicting a looming global recession in 2020. Large food factories located in epidemic centres had closed down due to some countries imposing a nationwide lockdown or for some, regional lockdown to contain the spread of the virus.
This has indirectly affected food retailers. While they saw panicky customers rushing to stock goods, retailers worry over a potential lockdown which might ruin their businesses as this will affect their supply chain as well as their manpower requirements. In severe crisis situation or complete lockdown, retailers will face a cutoff in supply of food products as manufacturers stop production, and they had to rely on their existing stocks available in their warehouses. Should COVID-19 be a protracted crisis which extends more than 1 year, food retailers might be unable to fulfill the needs of its consumers, while this will also lead to unprecented hoarding activities where people or businesses will then re-sell these goods at 5-10 times its retail prices. To avoid such possibilities, several major food retailers have adopted wise measures. In Singapore, NTUC Fairprice, owned by a government-led cooperative, has imposed purchase limits for shoppers on some essential food products like rice, instant noodles and vegetables to ensure that all consumers will have access to these products at all its stores. According to a Fairprice spokesperson, the buying limits have been set slightly higher than what an average consumer will buy. The Singapore government on the other hand has also assured the public that the country has adequate supply of food products which can last for almost a year. This has indirectly cooled down panic buying among shoppers.
Meanwhile, online delivery slots have also been fully booked and usually need to book a few days in advance as shoppers prefer to stay at home.
Apparently similar consumer purchasing pattern can be observed in other countries like Indonesia, Malaysia, Philippines and even Vietnam, which has one of the lowest number of COVID-19 cases in Asia. Supermarkets in HCMC also saw hoarding activities despite Ms. Nguyen Huynh Trang, Deputy Director of the Department of Industry and Trade of HCMC giving assurance that the city faces no scarcity of goods and she has advised consumers to calm down and not to stockpile unnecessarily.
Mr. Tran Ngoc Trung, CEO of Vinh Phat Investment JSC, which delivers 150 tonnes of rice daily to Co.opmart supermarket chain, reported that buying demand for rice at supermarkets jumped sharply since February. He added that despite the massive purchases, the company has sufficient inventory of up to 50,000 tonnes of rice and will focus on meeting domestic supply in the event of emergencies. The same goes for Vifon Company that saw demand for instant products soaring, which led it to cancel export orders. Vifon also has enough raw materials to ensure steady production in the next 6 months to 1 year so as not to affect consumer prices. The same goes for livestock products like meat and eggs.
Meanwhile, major supermarkets in Vietnam like Aeon, Lotte Mart and Big C have also increased the stocking of goods and stabilised their selling prices in the long term.
In China, the core centre of the pandemic, skyrocketing prices of essentials and vegetables in February had prompted the authorities to impose fines and monitor supermarkets. In one extreme example, the price of lettuce surged to nearly 8 times the usual price and the cost of Chinese cabbage jumped to around 5 times the usual price at one Carrefour supermarket in Shanghai, according to the city’s Market Supervision Administration. The store was fined Rmb 2 million (US$286,000) and ordered to lower its vegetable prices. Several domestic grocery stores in other Chinese cities had also been fined for price gouging.
In several cities in China, the local governments had sent officers to conduct price checks.