NATALIA SHAGAIDA: “HOW RUSH DEMAND AFFECTS ECONOMY"

Natalia Shagaida, Head of Agrarian Department of the Gaydar Institute, told the ”Sekret firmy” journal, whether customers’ behavior is rational amid sharply increased demand for certain goods.

Since 24 February, there have been almost daily reports of increased demand for a number of goods. For example, Russians hoarded pet products, feminine hygiene, medicines and Chinese smartphones. However, the biggest and most unexpected demand came for grocery foods, i.e. buckwheat, flour, sunflower oil, sugar etc. As early as the beginning of March, retailers started restricting sales of these products per customer, but this did not help much.

Natalia Shagaida believes that in many ways the consumer behavior is indeed irrational. At the beginning of the pandemic, there was a rush of consumer demand especially for low-value and long-life products. Later on, the supply-demand balance has evened out. However, the situation still differs from the spring of 2020, when the ruble devaluation was lower.

Thus, hedge buying of necessary imported medicines is a quite a smart decision, taking into account the increase in the exchange rate, said Natalia Shagaida. However, buying flour and cereals signifies purely emotional behavior, she said.

Will it be possible to harm the economy and ultimately the consumers due to the imbalance in this or another commodity market?

As practice evidences, manual management of shop prices only exacerbates the situation. In the long term, however, supporting domestic producers, fighting trade monopolies and a number of other strategic measures can give consumers confidence that goods they need will never disappear from the shelves.