Shoppers in the US went on a spending spree last month. Retail sales ticked up 1.4% in March, and if you zoom out, retail sales rose at an even faster clip of 4.2% compared to last year.
However, all that spending doesn’t necessarily spell good news for the economy with trade experts calling this a panic buying binge ahead of President Donald Trump’s tariff-driven price increases.
Headlines with the term “panic buying” have been splashed across media outlets, from the New York Times and CBS to Bloomberg and BBC. Here’s a quick primer on what panic buying is, when it occurs, and what to make of all this anxiety-induced shopping.
Setting it up: According to Cambridge University, panic buying is a “situation in which many people suddenly buy as much food, fuel, etc., as they can because they are worried about something bad that may happen.”
While panic buying is not a new concept, it’s hard to trace the specific origin of the term, but it has generally been used during periods of economic uncertainty, wars, and disasters throughout the 20th century—perhaps most vividly during the Covid-19 pandemic.
Although, what’s different this time around, Sucharita Kodali, VP and principal analyst at Forrester, told Retail Brew, is that it is not caused by shortages, but in anticipation of price increases.
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“[Panic buying] usually [occurs] around natural disasters, or if there is a very near term anticipation of shortages,” Kodali said. “And in this case, it’s not necessarily shortages, but it’s like availability of attractive pricing, I think is what may be different.”
“What’s unusual is that this is government policy-related,” she said. “I don’t think that I’ve seen anything of that nature ever happen. Usually it’s [linked to] exogenous environmental factors.”
Yay or nay: In recent weeks, shoppers have been queuing up outside big box retailers like Costco, car dealerships, and even Apple Stores.
But President Trump’s tariff decisions continue to fluctuate, with another 90-day pause implemented on April 9 for most countries, except China, which remains exempt from any temporary relief.
The advantage to panic buying, Kodali said, is “if prices do actually go up, you’ve locked in a cheaper price.”
The flipside is that prices don’t change at all. “I mean, this gets resolved, and you’ve gone out looking like a fool, rushing to buy things when really nothing has changed,” she added.
Ultimately, Kodali said, “this is the uncertainty of March 2020, with no adult in the room—like there’s no responsible person that is looking to stabilize the ship.”