During the peak of COVID-19 in 2020, and recently in the pending dock worker strike, store shelves were bare due to panic buying. It’s a phenomenon that keeps rearing its ugly head and people keep falling victim to the same trap. I wanted to take a few minutes and shed some light on the root of the problem and give you all some tips on how to navigate these scenarios and ideally avoid contributing to the underlying problem. So let’s dig into what goes on to drive this behavior.
Panic buying driven by herd mentality occurs when people see others rushing to purchase goods in large quantities, prompting them to do the same. This behavior is rooted in our social nature. We tend to look to others, especially in uncertain situations, for cues on how to act. When people witness others stocking up on items—whether it’s food, toiletries, or supplies—they feel the need to follow suit, even if there’s no immediate necessity. The thought process is often that if everyone else is doing it, there must be a good reason, even if the person doesn’t fully understand what that reason is. You see this in the wild when animals will move in unison when one sees a predator, the others realize there is likely danger and flee whatever is a threat.
Another factor fueling panic buying due to herd mentality is the fear of scarcity. Seeing shelves empty or watching news reports about shortages can create a sense of urgency. Even if the individual had no prior intention of purchasing a particular product, the mere sight of it disappearing rapidly can trigger the belief that the product will soon be unavailable. This fear of missing out (FOMO) compels people to act quickly, sometimes irrationally, buying more than they need to ensure they are not left without. The idea of “better safe than sorry” takes precedence over logical decision-making. FOMO is a topic I cover in my course because it ties into many financial aspects like investing and risk tolerance.
In many cases, this herd mentality can spiral into a self-fulfilling prophecy, where the fear of shortages leads to actual shortages. When large numbers of people start panic buying, they deplete stock faster than usual, exacerbating the scarcity problem. This further amplifies the panic and encourages more people to join in, creating a cycle that can be difficult to break. What begins as a few individuals acting out of caution can quickly escalate into widespread behavior, driven by social cues and the collective anxiety of missing out on essentials.
Knowing the underlying behaviors and drivers to panic buying, what should one do when they encounter these events? First I would have a plan in place for essentials. There are certain household items that don’t expire and are fine to have extra in case of emergencies. Canned goods and other nonperishable foods will store for quite some time and you can use them as a first-in first out method. Essentially use the oldest items first and backfill with new so you don’t have a bunch of expired food in your pantry. Toilet paper and other supplies are fine to stock up on. If the average public buys an extra pack of toilet paper every now and then, and not at the same time, it doesn’t strain the supply chain.
The other tactic to leverage is simple critical thinking. During the pandemic I was honestly perplexed about the toiler paper shortage. Of all things to worry about, that was toward the bottom of my list. Let’s be honest, there’s plenty of ways to clean your rear in an emergency. Taking a second to stop and think about the situation and possible solutions will often alleviate the urge to race to the store and buy. In the case of the dock worker strike, most people don’t realize that roughly 85% of toilet paper and other paper goods are produced domestically and would not be affected by the possible strike. Applying some simple logic in times of stress can often mitigate this problem and possibly prevent exacerbating the issue entirely.
