Money Talks is a column that explores what happens when business, the economy, and culture collide.
Crises have a way of reshaping behavior in ways that endure long after the trouble has passed. The stock market crash of 1929 scared ordinary Americans out of the stock market for decades. The Great Depression that followed famously instilled habits of thriftiness and caution in an entire generation. 9/11 remade our expectations of what you had to do to get on an airplane or even walk into an office building.
Ever since the coronavirus hit in March, businesses and pundits and social scientists have been speculating about how the pandemic might permanently alter the economy and society more generally. There are some obvious big structural shifts that may endure: an acceleration of the demise of traditional retail, quicker growth for e-commerce, and more widespread use of remote work. But the pandemic also seems to be reshaping consumer psyches, and therefore consumer habits. In the simplest sense, it’s turning us into a nation of hoarders.
Of course, we all remember that back in March and April, when the pandemic first hit, Americans went on a spree of what was then called “panic buying,” denuding stores of household cleansers, hand sanitizers, milk, fresh vegetables, frozen foods, and, above all, toilet paper. And they bought deep freezers and bigger refrigerators to store all this stuff. Groceries had been the quintessential low-growth business. But Americans bought so much in the early spring that by one measure, they packed eight years of future growth in grocery sales into a couple of months.
The assumption, though, was that this would not last. All of this panic buying was, in effect, pulled forward from the future, which meant that sales of previously in-demand products would fall sharply in the months that followed as people held off buying again until their giant stockpiles were used up. And yet, as it turned out, this didn’t happen.