Thread: Economics of empty shelves
1- Stores stock shelves to maximum to give consumers sense of safety & buy only what they need, so they come back often. Studies show that, in general, consumers buy more than the items they wanted every time they come to the store..!
1- Stores stock shelves to maximum to give consumers sense of safety & buy only what they need, so they come back often. Studies show that, in general, consumers buy more than the items they wanted every time they come to the store..!
2- Gas stations want to give the same sense of security by having a number of pumps that are available most of the time, and many, all the time. The last thing a gas station owner or manager want to is to run out of gasoline.
3- Empty shelves sends the wrong massage: Things are running out, for every thing or certain items. Even those who have no idea what is going one will start developing a sense of urgency and buy. Even cool-headed people might end up and end up participating in the panic buying.
4- Same thing for gasoline: driving by gas stations that have no gasoline makes people who do not need gasoline fill up at the first opportunity, regardless if the panic is warranted or not.
5- Community leaders and politicians can create panic buying by talking about empty shelves, although the shelves are full. But after their statements, shelf will be empty.
6- Inability of stores to restock shelves and gas stations to refill their tanks quickly can accentuate the panic and turn it into crisis. We are all paying the price all those efficiency theories of supply chain and inventory management.
7- Just in time supply means a crisis during panic, just like what we see today around the world. The media is making the situation worse by podcasting pictures of empty shelves. They are telling others: go now and empty shelves that are still have something on them
8- I made all the above introduction to drive home two points. The first is from 1990: President Bush could not get the Congress to support his efforts to launch a ware and liberate Kuwait from eth occupation of Iraq. So his team resorted to public relations firms.
9- There are many stories that are used as part of justification for war, many have been proven to be lies, but I will focus on one related to empty shelves, and todays panc buying.
10. A PR firm hired by the Bush administration gave pictures of empty shelves in Kuwait city, claiming that Iraqi soldiers emptied all shelves and took everything back to Baghdad. Kuwaitis have nothing to eat, therefore, we should launch a war to save them.
11- CNN showed the pictures with a very emotional story. Congress members were outraged. Many shifted their positions & started supporting the war.
By the second day, actual footage from Kuwait showed empty shelves and people were stock piling, confirming the CNN breaking story
By the second day, actual footage from Kuwait showed empty shelves and people were stock piling, confirming the CNN breaking story
12- Here is the problem: The pictures that CNN showed were taken in a store here in the US! Kuwaitis, who were following CNN religiously at that time as their only major source of information, believed, ran to the stores, and emptied the shelves! But there were no food shortages.
13- It turns out the shelves were full until CNN showed the pictures. In the interviews I conducted at that time with Kuwaiti families after the war, some Iraqi soldiers stole from storage facilities and took it back to Iraq. Iraqis were so poor to buy, so .. next
14- So they brought them back to Kuwait, along with Iraqi food supplies to sell to Kuwaitis who were in total panic, buying anything they get, for any price. Iraqi soldiers pocketed the money.
15- When the war ended, Kuwaiti families ended up with thousands of tons of canned food items, most of it were destroyed or thrown away.
That was the story of a "Message of an Empty Shelf"
Are you sending a message by emptying shelves?
cheers
That was the story of a "Message of an Empty Shelf"
Are you sending a message by emptying shelves?
cheers
