In-flight magazines disappear into thin air.

The first issue (1966) …

The first-ever in-flight magazine has now become the latest one to fold.  American Airlines debuted its seatback publication back in 1966, establishing a precedent that would soon be followed by all the other U.S.-based passenger airlines as well as many foreign carriers.

The American Way (later shortened to American Way) started out as a slender booklet of fewer than 25 pages that focused on educational and safety information about American Airlines, its equipment and staff.  Initially an annual publication, American Way soon became a monthly magazine.

Its early success was due to the captive audience that were airline passengers “back in the day.”  Unless you brought your own book or periodicals on board, the in-flight magazine was a welcome way to pass the time in lieu of conversing with your seatmates or simply dozing.

As all other American passenger carriers launched their own in-flight magazines, many of them grew to more than 100 pages in length.  In their heyday, it’s very likely that the readership levels of these publications outstripped those of many consumer magazine titles.

But as with so much else that’s happened in publishing, they were destined to become a casualty of changing consumer behaviors.  Interest in leafing through in-flight magazines dropped off when travelers started uploading books, movies and TV shows onto their electronic devices – or tapping into the airlines’ own electronic entertainment options.  And when that happened, advertiser interest – the lifeblood of any commercial publication – fell off as well. 

… and the last issue (June 2021).

American Way’s last issue is this month.  Proud to the last, its cover story is about “America’s hippest LGBTQ neighborhoods.”  But after June, the magazine will join the in-flight publications that were dropped by Delta and Southwest Airlines during the COVID-19 pandemic and won’t be returning.

To be sure, several of them continue to hang on.  United Airlines’ Hemispheres magazine is due back on planes in July, and Virgin Atlantic has plans to relaunch its magazine Vera in September.  But these would seem to be in the minority as the other in-flight magazines have disappeared into the ether. 

Will they be missed?  Travel analyst Henry Harteveldt doesn’t seem to think so, stating recently to USA Today:

“I don’t think frequent travelers – or infrequent travelers – will notice or really care to any great degree if the magazine[s] disappear.  Certainly, nobody ever chose an airline because of the in-flight magazine.”

I’m in agreement with Mr. Harteveldt on this.  But how about you?  Will you be missing in-flight magazines at all?

A second look at the prospects for persistent price inflation in our future.

The blog post I published this past week about reports of recent price hikes and what this might portend for the future has sparked some interesting feedback and comments.  Based on that feedback, it appears that feelings are mixed on whether we’re poised to  be entering a period of prolonged inflation. 

Responses from two people in particular are worth highlighting for the “countervailing views” that they espouse.  I think both have merit.

The first response came from my brother, Nelson Nones, who has lived and worked outside the United States for decades.  His perspectives are interesting because, while fully understanding domestic events and policies, he also brings an international orientation to the discussion due to his own personal circumstances.  Nelson is looking to history for his perspectives on the inflation issue, offering these comments:

The chart below shows annual U.S. CPI percentage change for the past 106 years:

Note:  See https://www.usinflationcalculator.com/inflation/consumer-price-index-and-annual-percent-changes-from-1913-to-2008/ for source data.

Projecting the latest (April 2021) Consumer Price Index forward to an entire year suggests that the U.S. will experience a 3.1% inflation rate in 2021.  That would be higher than in any year since 2011, which was a bounce-back year following the Great Recession.  Otherwise, the generic inflation trend has been consistently down since 1982 (nearly 40 years).

If the historical trends are any guide, and if we are indeed entering a persistent inflationary phase, it would take another decade before inflation growth approaches the levels seen during the 1970s.

But I think the likeliest scenario is experiencing a sharp uptick this year due to pent-up demand following the COVID-19 pandemic that will causie spot shortages, followed by resumption of a downward trend over the following ten years or so.

That’s similar to the pattern you can observe in the chart [above] during the years following the end of World War II, which had also created massive pent-up consumer demand.

Consider that the coronavirus pandemic hasn’t really altered the underlying economic fundamentals. The past 40 years has witnessed an explosion of manufacturing capacity in China and other developing countries, and that hasn’t gone away.  Meanwhile, dependency on oil — a key driver of inflation in the 1970s — has shrunk due to improved energy efficiency and aggressive exploitation of renewable energy resources, which for all practical purposes are in infinite supply.

Another factor, which doesn’t get as much attention as it probably should, is declining birth rates and aging of the population on a global scale, leading to a slower rate of population growth in the future that may constrain demand for consumer products in comparison to the past century. Let’s face it — we old farts just don’t consume as much as growing families do!

So yes, we should keep an eye on inflation — but I don’t think we’re in for a repeat performance of the horrible 1970s.

Echoing Nelson’s thoughts are the perspectives of another business veteran — an editor and publisher who has been intimately involved in the commercial/B-to-B field for decades.  Here is what he wrote to me:

I don’t want to get into a public debate with the inflationistas because I will never convince them that this is likely not a replay of the 1970s and early 80s inflationary period pre-[Paul] Volcker.  (Speaking personally, I didn’t own a house until I was 42 for the very reasons you cited in your blog post, and I was just a lowly editor back then.)

What we’re seeing today is simply the price shock of suddenly soaring demand, aggravated in the case of some commodities such as steel by Trump-era tariffs.

All commodities are tied to the price of crude oil, the most volatile of all commodities, which is long-denominated in U.S. dollars. WTI crude pricing is now at around $63 per bbl. — about where it was in early 2020 before the pandemic hit. It went negative for a time during the worst period of the crash in worldwide demand that was brought about by the pandemic. Tanks couldn’t be found into which to put the excess crude coming out of the ground from U.S. fracking. Traders freaked out, as they sometimes do.

So naturally, the percentage changes today look jaw-dropping. I can go through all the other commodities mentioned in your post and provide simple explanations as to why each is currently on the rise. Logistical bottlenecks are a big problem with everything — but as with oil, most of the issue is the sudden surge in demand as the pandemic winds down even as production and logistics aren’t yet prepared to fulfill the need.

In other words, the situation has very little to do with government spending — especially since most of the infrastructure money isn’t even allocated, let alone spent. Also, the Biden administration has yet to raise a single tax. It can’t. Only the House Ways and Means Committee can initiate tax changes, and those must then go through the Senate to become law. Senate Minority Leader McConnell and his allies have made sure nothing has gotten through.  

Of course, it never hurts to keep an eye on things — especially with structural inflation as you noted in your article.  But it’s important to look also at other, broader data. The Producer Price Index in April did reflect the increase in commodities prices, but the Consumer Price Index, even though it had a month of robust increases, remains below 3% annualized. And the Personal Consumption Expenditure Price Index, which is what the Fed pays attention to the most, is still tracking under 2% on an annualized basis. (A little inflation can be a good thing, actually.)

On the income side, average wage rates aren’t rising; they’re more likely to be falling in the future as low-wage service workers, including those in foodservice, re-enter the market.

So in my view the things people see with inflation are most likely short-term issues. Let’s look at it again in six months to a year. I’d also suggest that people read economist Paul Krugman’s columns in the New York Times for a bit of perspective that’s counter to the views of the inflationistas, if only for balance. The monetarists have been wrong since Volcker squeezed out the inflationary spiral. It was painful, though — so we’ll want to keep an eye on things.

Considering the views put forward above, I think it’s fair to conclude that “the jury’s out” on whether we’re actually entering a prolonged inflationary period.  If you have additional thoughts or perspectives to share on either side of the issue, I’m sure other readers would be interested to hear them.  Feel free to leave a comment below.

That 70s Show: Inflation is back.

The rise in lumber prices has received a certain degree of coverage in the news in recent weeks and months.  For anyone who used the “pandemic period” to engage in home remodeling or renovation projects – perhaps moving away from “open concept everything” to reintroduce the designated spaces of yesteryear – the eye-popping price of lumber has come as something of a shock.

As for explaining the sharp increase, it’s logical to think that prices are directly correlated to the increased demand for the product.  But this explanation is incomplete; the steep price rise in a wide range of commodities well beyond just lumber tells us that inflation isn’t relegated to just a few high-demand product categories.  It’s the closest thing to “across the board” that we’ve seen in over 40 years — and the issue seemed to come out of nowhere.

Price inflation has been such a non-factor for so many decades, most consumers don’t even have personal memories of it.  But those of us “of a certain age” remember well how difficult it was to navigate an “inflation-everywhere” environment where annual salary increases could never keep pace with rising prices. 

It was difficult on people with fixed incomes, of course, but perhaps worse for young consumers who found that struggling to save for a down payment on a house purchase was a losing proposition as the gap widened rather than narrowed year over year.  Living like a monk while scrimping and saving for a house gets old when you realize that your efforts aren’t getting you anywhere near where you’re attempting to go … 

As for the situation now, the inflation warning signs are all around us if we dare to look. According to a report published in the May 21, 2021 issue of The Wall Street Journal, lumber may exhibit the most visible spike in prices, but consider what futures prices are showing for a whole range of commodities when compared to just one year ago:

  • Gold:  +7%
  • Platinum:  +29%
  • Wheat:  +31%
  • Cotton:  +40%
  • Coffee:  +42%
  • Sugar:  +52%
  • Silver:  +56%
  • Natural gas:  +65%
  • Soybeans:  +81%
  • Crude oil:  +85%
  • Cooper:  +86%
  • Gasoline:  +96%
  • Corn:  +108%
  • Lumber:  +278%

It doesn’t take a degree in economics to know that these sorts of trends are pretty alarming.  Whenever it has an opportunity to take hold, inflation is one of the most insidious of economic problems – and one that’s extremely difficult to reverse.  Inflation is also very debilitating for the personal budgets of the large majority of consumers, and it causes the most harm to those on the lower rungs of the economic ladder.

The next few months will tell us if this particular inflation is going to be a temporary phenomenon or not.  How much of the commodity price increases are attributable to transitory events that will ease as the world’s economies move further from lockdown?

But if this inflation turns out to be something more structural or more directly correlated to the massive increase in government spending paid for by the expanded money supply, expect the economic (and political) climate to begin to look vastly different in the coming months. 

Inflation will be uncharted territory for most people.  But a few of us veterans will be around to provide context and counsel — and perhaps engage in a bit of “Sister Toldja” commentary while we’re at it …

COVID Casualty: Office Gossip

Nearly everyone dislikes “office politics.”  But does day-to-day employee gossip rise to that level?  And have we lost something actually beneficial in the wake of remote work limiting our in-person interactions?

Ever since we were children, most of us have been conditioned to regard gossiping as a negative trait that any caring person should avoid doing. 

At its core, the definition of the term is “people speaking evaluatively about someone who isn’t there.”  But gossip can also relate to talking about rumors and conjecture regarding topics that go beyond just people.

Historically, gossip or the rumor mill in the office often served as a means by which anodyne-sounding corporate announcements would be subjected to a healthy degree of “whispered conversation and conjecture.”  Or, as one DC-area employee put it in a recent Wall Street Journal article, ”You hear the surface story, and then you learn what the real story was – and that’s the gossip.”

In the months since mandatory office workplace lockdowns have been imposed, the gossip mill has fallen on hard times.  Instead of serendipitous conversations happening in the lunchroom, in hallways or following group meetings, many workers are spending their days with just one person – themselves.  Or they might be interfacing via Zoom meetings with the same handful of people from their core work team, where it’s always the same information being recycled among the same group of people.

Even for employees who have returned to working at their corporate offices, hybrid schedules often mean that there are far fewer daily interactions happening with other employees.

On one level, the reduction in gossiping may be reducing workplace “drama” and helping people focus better on their actual work tasks.  Although the evidence is murky, productivity studies do appear to show an uptick in employee productivity since the onset of the COVID-19 pandemic.

On the other hand, in a recent survey of ~500 employees and business owners conducted by international legal consulting firm Seyfarth Shaw, the item that respondents missed the most after a year of remote working was “in-person and grown-up workplace conversations.”

For senior leadership, office gossip has been one way to rely on a kind of “early-warning system” about corporate initiatives or directives.  In every office there seem to be a few people who have the pulse of the organization – it might be an executive assistant or some other staff support functionary – who other people feel comfortable confiding in and who in turn can communicate “the upshot” to the top brass.  While difficult to quantify, that sort of dynamic really counts for something.

Of course, human nature being what it is, office gossip is never going to go away completely.  But Skype or Zoom calls feel forced, and typing out thoughts or conjecture on IMs or e-mails is borderline-weird and feels inherently risky.  

On balance, do you welcome the decline of face-to-face “gossip conversations” with colleagues — or do you suspect that a useful guerilla communications conduit has been lost?  Please share your perspectives with other readers.

Robots become humans – at least in the eyes of the law.

It had to happen:  New state laws are now classifying robots as humans – specifically when it comes to traffic laws.

With the proliferation of delivery robots in quite a few urban areas, the issue was bound to arise.  Car and Driver magazine reports that the state of Pennsylvania now defines delivery robots as “pedestrians” under a newly implemented law.

More specifically, the Pennsylvania legislative measures stipulate that “autonomous delivery robots” can lawfully maneuver on sidewalks, roadways and pathways.  They’re allowed to carry cargo loads as heavy as 550 lbs. at speeds up to 25 mph. on roadways.  (On pedestrian pathways and sidewalks, their speeds are capped at 12 mph.)

Pennsylvania is just the latest state to pass new laws regulating autonomous driving and flying technologies.  Indeed, there are now a dozen states that allow delivery robots access to roads as well as pedestrian pathways.

A gita and its owner out for a stroll.

The new laws raise some interesting questions.  Undeniably, delivery robots are a popular option for businesses and logistics companies; in a relatively short period of time their deployment has evolved well-past that of being merely a “novelty factor.”  “The sidewalk is the new hot debated space that the aerial drones were maybe three or five years ago,” reports Greg Lynn, CEO of Piaggio Fast Forward, a robotics design firm that offers a suitcase-sized robot called gita that follows its owner around.

But deploying robots onto street- and sidewalk-grids that were mapped out decades ago – when there were no expectations of the sci-fi scenarios of autonomous vehicles – can be quite problematic from a safety standpoint.

Of course, we’ve faced this issue before – and not so very long ago – with the emergence of the Segway “people mover.”  Those contraptions have caused more than a few problems (accidents and injuries) in urban centers around the world, leading some European center-cities to effectively ban their use — such as in Budapest and Barcelona

And in the city of San Francisco – no technology backwater – delivery robots have been prohibited from operating on most city streets.  Municipal leaders have cited potential safety concerns.  Moreover, the National Association of City Transportation Officials (NACTO) has gone on record stating that robots “should be severely restricted, if not banned outright.”

One thing’s for sure:  With the fast-growing phenomenon of delivery robots and other autonomous vehicles, the whole notion of “sharing the road” has taken on an additional dimension. 

Do you have any interesting reports to share from what you may have encountered in your own town or region?  Please share your observations with other readers.

The consequences of COVID on office space leasing.

One of the many ripple-effects of the COVID-19 pandemic is the effect it’s had on the demand for commercial office space. 

In a word, it’s been pretty devastating. 

The numbers are stark.  According to an estimate published by Dallas-based commercial real estate services and investment firm CBRE Group, Inc., as of the end of 2020, nearly 140 million sq. ft. of office space was available for sublease across America. 

That’s a 40% jump from the previous year.  Not only that, it’s the highest sublease availability figure since 2003, which means the situation is worse than even during the Great Recession of 2008.

Of course, it isn’t surprising to expect that more sublet space would become available during periods of economic downturn, when many businesses naturally look for ways to cut costs.  But those dynamics typically reverse when the economy picks up again.  This time around, it’s very possible – even probable – that the changes are permanent.

The reason?  Many companies that reduced their office space footprint in 2020 didn’t doing so because they we’re suffering financially.  It was because of government-mandated lockdowns.  And now they’re expecting many of those employees to continue working from home, either part-time or full-time, after the pandemic subsides. 

Employee surveys have shown that many workers prefer to work from home where they can avoid the hassle and expense of daily commuting.  It’s understandable that they don’t want that to change back again.  In many business sectors which don’t actually need their workforce be onsite to produce revenue, companies are simply ratifying a reality that’s already happened.  Accordingly, they’ve changed their expectations about employee attendance at the office going forward.

Commercial landlords are now feeling the long-term effects of this shift in thinking.  Rents for prime office space fell an average of 13% across the United States over the past year.  In places like New York and San Francisco the drop has been even steeper — as much as a 20% contraction.

For many of the lessees, it’s less onerous to sublease space to others rather than attempt to undertake the messy business of renegotiating long-term lease contracts with landlords.  Still, there’s pain involved; sublease space historically comes with a significant discount — around 25% — but with the amount of sublet space that’s been coming onstream, those discounts may well go even deeper due to the lack of demand.

The cumulative effect of these leasing dynamics is to put even more downward pressure on broader rental rates, as the deeply discounted space that’s available to sublet puts more pressure on the price of “regular” office space.  It’s a classic downward spiral.

Is there a natural bottom?  Most likely, yes.  But we haven’t reached it yet, and it’ll be interesting to see when — and at what level — things finally even out.  In the meantime, it isn’t a very pretty picture.

What are you witnessing with regards to office space dynamics within your own firm, or other companies in your business community?  Please share your thoughts below.

Have we finally reached “peak oil”?

Likely not in crude oil consumption, but the IEA is now projecting that demand for gasoline will never return to its pre-COVID level.

This past week the International Energy Agency (IEA) issued an intriguing forecast about future of gasoline consumption.  If true, it means that the world will have reached its peak demand for gasoline back in 2019, and won’t ever again return to that level.

Of course, with the advent of electric vehicles, the day when gasoline demand would begin to decline was bound to come sooner or later.  But the COVID-19 pandemic has hastened the event. 

During the widespread restrictions on work and travel imposed by most governments in 2020, daily gasoline demand dropped by more than 10%. Some of that demand is expected to return, but the global shift towards electric vehicles — not to mention continuing improvements in fuel efficiency in conventional gasoline-powered vehicles themselves — means that any growth in demand for gasoline within developing countries will be more than offset by these other forces.

In 2019, only around 7 million electric vehicles were sold worldwide, but that number is expected to grow steadily, reaching 60 million annually just five years from now.  Several major car manufacturers have committed to selling electric vehicles exclusively in future years, including Volvo (committed to all-electric vehicle sales by 2030) and GM (by 2035).

As for the demand for crude oil, it is expected to rebound from 2020’s dip to reach as much as 104 million barrels per day by 2026, which would be around 4% higher than the usage that was recorded in 2019.  Asian countries – particularly China and India – will be responsible for all of that increase and more, even as some developed nations are expected to see a drop in their demand for crude.

The implications of these forecasts are far-reaching – as are the questions they raise.  How well will the legacy car companies perform in comparison to the new all-electric car company upstarts?  Can they remake themselves quickly enough to preserve their market position vitality? 

What will the effects of lower demand for gasoline – and a lower pace of growth in demand for crude – be on global climate change?  Dramatic? … or only minimal?

What do the prospects of lessening demand for crude do to the economies (and politics) of countries like Saudi Arabia, Iran, Venezuela and other key OPEC nations?  Will lowered demand lessen geopolitical tensions? … or contribute to even bigger ones?

If you have thoughts or perspectives on these points, please share them in the comment section below.

America turns the corner on air travel.

This past Sunday a major milestone was reached in U.S. air travel.  The Transportation Security Administration reported that 1.34 million people passed through checkpoints at U.S. airports on that day. 

This was slightly more passengers than the TSA had screened on the comparable Sunday a year ago. But what makes the figure particularly newsworthy is this:  It’s the first time that the number of people flying in the United States has eclipsed the year-ago figure since the onset of the coronavirus pandemic in this country.

Even more encouraging, Sunday was the fourth straight day that the TSA had reported more than 1 million people passing through its checkpoints. 

The TSA’s seven-day moving average of passenger traffic has now reached its highest level since March 2020, when air travel essentially collapsed in the wake of the spread of COVID-19.

Of course, this doesn’t mean that the amount of air travel is anything near the levels that were typically seen in 2019, the year before the pandemic struck.  Indeed, daily traffic is still off by 45% to 55% compared to two years ago.

Ed Bastian

Looking back over the past year, there have been a few occasions where air traffic has edged higher, only to recede again.  But those brief upticks were charted during the holidays.  This time, the recovery seems real, according to Ed Bastian, the CEO of Delta Air Lines. 

Southwest Airlines reports the same dynamics, citing increased leisure trip bookings.

On the other hand, business travel continues to lag — big time. But taken as a whole, the market is looking up. And that’s the best news the U.S. airline industry has had seemingly in eons.

What about you? How have your feelings evolved regarding air travel, and are you making plans for air travel in the coming weeks or months?

Changing the “work-live location paradigm” in the wake of the coronavirus pandemic.

As the COVID-19 pandemic grinds on, its long-term implications on how we will live and work in the future are becoming clearer. 

Along those lines, a feature article written by urban studies theorist Richard Florida and economist Adam Ozimek that appeared in this past weekend’s Wall Street Journal explores how remote working has the potential to reshape America’s urban geography in very fundamental ways.

Just before the first lockdowns began in April 2020, fewer than 10% of the U.S. labor force worked remotely full-time.  But barely a month later, around half of the labor was working remotely.  And now, even after the slow easing of workplace restrictions that began to take effect in the summer of 2020, most of the workers who were working remotely have continued to do so.

The longer-term forecast is that perhaps 25% of the labor force will continue to work fully remote, even after life returns to “normal” in the post-COVID era.

For clues as to why the “new normal” will be so different from the “old” one, we can start with worker productivity data.  Stanford University economist Nicholas Bloom has studied such productivity trends in the wake of the coronavirus and finds evidence that the productivity boost from remote work could be as high as 2.5%. 

Sure, there may be more instances of personal work being done on company time, but counterbalancing that is the decline of commuting time, as well as the end of time-suck distractions that characterized daily life at the office.

As Florida and Ozimek explain further in their WSJ article:

“Major companies … have already announced that employees working from home may continue to do so permanently.  They have embraced remote work not only because it saves them money on office space, but because it gives them greater access to talent, since they don’t have to relocate new hires.”

The shift to remote working severs the traditional connection between where people live and where they work.  The impact of that change promises to be significant for quite a few cities, towns and regions.  For smaller urban areas especially, they can now build their local economies based on remote workers and thus compete more easily against the big-city, high-tech coastal business centers that have dominated the employment landscape for so long.

Whereas metro areas like Boston, San Francisco, Washington DC and New York had become prohibitively expensive from a cost-of-living standpoint, today smaller metro areas such as Austin, Charlotte, Nashville and Denver are able to use their more attractive cost-of-living characteristics to attract newly mobile professionals who wish to keep more of their hard-earned incomes. 

For smaller urban areas and regions such as Tulsa, OK, Bozeman, MT, Door County, WI and the Hudson Valley of New York it’s a similar scenario, as they become magnets for newly mobile workers whose work relies on digital tools, not physical location.

Pew Research has found that the number of people moving spiked in the months following the onset of the coronavirus pandemic – who suddenly were relocating at double the pre-pandemic rate.  As for the reasons why, more than half of newly remote workers who are looking to relocate say that they would like a significantly less expensive house. The locational choices they have are far more numerous than before, because they can select a place that best meets their own personal or family needs without worrying about how much they can earn in the local business market.

For many cities and regions, economic development initiatives are likely to morph from luring companies with special tax incentives or other financial perks, and more towards luring a workforce through civic services and amenities:  better schools, safer streets, and more parks and green spaces. 

There’s no question that the “big city” will continue to hold attraction for certain segments of the populace.  Younger workers without children will be drawn to the excitement and edginess of urban living without having to regard for things like quality schools.  Those with a love for the arts will continue to value the kind of convenient access to museums, theatres and the symphony that only a large city can provide.  And sports fanatics will never want to be too far away from attending the games of their favorite teams.

But for families with children, or for people who wish to have a less “city” environment, their options are broader than ever before.  Those people will likely be attracted to small cities, high-end suburbs, exurban environments or rural regions that offer attractive amenities including recreation. 

Getting the short end of the stick will be older suburbs or other run-of-the-mill localities with little to offer but tract housing – or anything else that’s even remotely “unique.”

They’re interesting future prospects we’re looking at – and on balance probably a good one for the country and our society as it’s enabling us to smooth out some of the stark regional disparities that had developed over the past several decades.

What are your thoughts on these trends?  Please share your perspectives with other readers.

Tissue issue: Explaining the curious connection between the coronavirus pandemic and toilet paper shortages.

How did the pandemic drive consumers to purchase reams and reams of toilet paper?

Just after coronavirus cases started appearing in Europe and North America, two things began to happen.  One was restrictions on people’s movements — soon leading to lockdowns nearly everywhere.

The other was a run on toilet paper that seemed to go on for months and months.

While other necessities suffered temporary product shortages as well, toilet paper in particular seemed to be affected the most. And as its disappearance from the store shelves became widely reported, the shortage began to take on near mythic proportions.

Photos of barren shelves were plastered all over the news and shared on social media – even giving the rise to a flourishing resale market in which the price of TP skyrocketed.  

It’s little wonder that at the same time, thefts of toilet paper began to be reported across the globe.

Surveys conducted among consumers in North America and Europe found more than a few people admitting that they had begun hoarding toilet paper – more than 17% of North Americans and nearly 14% of Europeans acknowledging so.

Just what is the correlation between a health crisis like COVID-19 and the sudden unavailability of a product like TP, of all things?

It’s the kind of question that no doubt intrigues researchers in the field of consumer behavior.  In January, a team of five analysts in Spain published a review of the available research on the topic.  Their reporting suggests that several factors were likely at work – some more significant than others.  Here is a synopsis of what they reported:

Potential Factor #1:  Diarrhea

As coronavirus cases began to rise, more people were experiencing increased gastrointestinal symptoms and diarrhea — either induced by stress or by the COVID-19 itself.  However, medical studies suggest that only about 13% of people who contract COVID have significant diarrhea as one of the symptoms or side effects.  That 13% is actually a relatively low proportion of COVID patients, and therefore can’t explain much of the global surge in toilet paper purchases.  Verdict:  Unlikely factor.

Potential Factor #2:  Actual Product Shortages

A more likely explanation for the run on toilet paper is that the product was merely one of numerous necessities that consumers went out to purchase in abundance as lockdowns began to take effect around the world.  But whereas items like canned foods were able to be more readily restocked, toilet paper wasn’t.  In this scenario, supply chains weren’t prepared for the sudden the shift in demand from commercial-quality to residential-quality toilet paper, paper towels and such.  As a result, it took longer for production to retool and meet the increased demand.  Verdict:  Somewhat more likely factor.

Potential Factor #3:  Fear — Magnified by the Media

As the news media began to report on empty shelves, toilet paper buying patterns that had initially been in line with those seen for other sought-after goods now reached frenzied proportions.  The “FOMO factor” (fear of missing out) increased bulk buying and hoarding behaviors even more.

Adding to the fevered environment was an additional factor, as explained by Dr. Brian Cook, who is a member of the Disaster Risk Reduction initiative at Australia’s University of Melbourne:

“Stocking up on toilet paper is … a relatively cheap action, and people like to think that they are ‘doing something’ when they feel at risk.”

The TP buying craze has been seen before.  Toilet paper shortages were recorded during the political crisis in Venezuela in 2013 … following the terror attacks on the Twin Towers in New York City 2001 … and even as far back as the 1973 OPEC oil crisis.

I guess the bottom line is this: When the sh*t hits the fan, it’s the toilet paper that wipes out …