Excess buying fueling inflation

Lynnwood Grocery Fine
Posted at 7:48 PM, Apr 29, 2022
and last updated 2022-04-29 22:40:05-04

ESTILL COUNTY, Ky. (LEX 18) — Retailers say some people are buying items in bulk, so they don't have to pay potentially higher prices down the line.

One economist says there is a term for this behavior, and it is only adding to the problem.

Brandy Acree, assistant manager of True Blue Pools, does not want a repeat of 2021.

"A shortage, everyone trying to buy more than we had," said Acree.

She said after news broke about a nationwide chlorine shortage last year, workers begged shoppers not to buy more supplies than they needed to not make matters worse.

But hundreds of people still rushed into the store to stock up. Just in case.

"It increased the demand, and the supply just couldn't keep up," said Acree.

With increased demand and shorter supply expected for the summer of 2022, Acree says that means higher prices.

"Everything has increased in price," said Acree.

Could hoarding supplies be fueling inflation problems?

University of Kentucky's Dr. David Hardesty, a research professor at the Gatton College of Business and Economics says inflationary psychology is the reason.

"The idea is that consumers see prices rising and they have the expectation that they will continue to rise. There is some subset of people that are going to buy, and they are buying quicker and maybe more in bulk than they could. The notion is that if demand increases and potentially supply goes down then you are fueling the inflation," said Hardesty.

Hardesty said this mindset can be fueled by several things, including something called "inaction regret."

"People report that they are going to regret if they don't do something. People might see prices rising, and they might stock up on toilet paper and tissues and that kind of thing. The idea from an economist perspective is that now you are almost fueling or boosting inflation," said Hardesty.

He said one solution could be placing restrictions on certain items.

"They could figure out which products are going to kind of be the common ones that are going to spike inflation," said Hardesty.

But the decision to do better lies with the customer.