Despite the spike in grocery stock-outs that occurred in the wake of COVID19 and the subsequent supply chain disruptions, we still don’t have a good handle on “normal” levels of stock-out rates. The only public data I’m aware of on this topic is this data dashboard by IRI; however, it only shows data for the most recent few weeks and I find the data a bit difficult to interpret. We’ve been asking a question about stock-outs in our monthly consumer survey (e.g., see figure 20 in this release), and we’ve noticed a steady decline in the share of consumers reporting that they can’t find specific grocery items over the past year.
With that background and context, I was pleased to see a new paper in the journal Applied Economics Perspectives and Policy by Patrick McLaughlin, Alexander Stevens, Shawn Arita, and Xiao Dong. The authors used grocery store scanner data to infer when items were out of stock in the time frame surrounding COVID19.
Their data confirms what we all experienced: Stock-outs increased in the wake of COVID19 shutdowns. Nonetheless, it is interesting to see that the rates were fairly low.
The authors write:
“ For a sample of 4704 stores belonging to large regional and national grocery store chains, we documented large and sustained increases in weekly stock-out rates following the declaration of the national emergency concerning the COVID-19 pandemic on March 13, 2020. Among fixed-weight packaged items, stock-outs during the pandemic were the most concentrated in meat and poultry categories, possible FAFH substitutes such as frozen pizza and refrigerated entrees, carbonated beverages, baby formula, and frozen fruit. This finding was consistent with media reports and rising search engine interest in stock-outs lending credence to the stock-out measure. When examining all food products together, significant increases in total store weekly stock-outs coincided with increases in sales from 3 or more weeks prior (e.g., sustained increases in sales). Otherwise, it appeared that retailers tended to accommodate consumer demand in terms of general product availability during very short-run sales spikes of 1 or 2 weeks during the pandemic.”
They also studied price impacts.
“For the top 15 most stocked-out categories in the sample of grocery stores, sustained increases in stock-outs appeared to coincide with consumers paying slightly higher average prices within each category”
There are many more interesting results - check the whole thing our here.