One of the biggest concerns consumers have been wrestling with over the past few months is whether or not to purchase certain products. The memory of product shortages from the COVID-19 crisis is still fresh in our minds. Now we hear of the potential for shortages as a result of tariffs, which could cause retailers to cut back on ordering products that may face higher prices and consumer pullback.
Let’s put supply concerns into perspective. The US population is reported to be 340 million people. The number of retail stores is reported to be 1.8 million, with another 2.5 million to 3 million online sites that sell products. That translates to a ratio of 79 people per retail outlet. Looking at stores alone, that’s a ratio of 188 people per store. Unless a seismic stoppage of product movement occurs, concerns about a short supply of product are likely unfounded.
Yes, specific product categories or items could face supply disruptions, but for most, there are alternative products that can act as substitutes. Sure, it might not be the favorite brand or style, but in times of need, sacrifices are made. Perhaps a consumer’s favorite fragrance is in short supply — they may choose to wait until it is replenished at their favorite store, or they might search other stores or scour the internet to find it elsewhere. If the product in question is a gift, and waiting is not an option, the consumer will likely find a close alternative.
Consumers continue to show their spending resilience. In spite of all the obstacles thrown at the consumer of late — higher food prices, the roller coaster of tariff concerns, and, for some, mounting debt — retail sales continue to run at a growth rate of 2%* over last year’s levels, because the consumer continues to spend.
So, the next time you worry about a product being in short supply, think about all the stores and websites you can shop at, and think about how much product is already available. There are product segments where supply could run low, and if it’s something the consumer can’t live without, they will buy it. But the vast majority of the products consumers buy today are not affected by tariffs or at risk of shortage.
Today’s tariff battles are not the same as the broad disruption caused by the global pandemic that shut down the world. Consumers will continue to find and buy products; they may just have to do a little extra searching.
*Source: Circana, Retail Sales for Food and Beverage, Consumer Packaged Goods, and General Merchandise
See also: Circana Research: Female Shoppers Are Slowing Discretionary Purchasing Faster Than Men
