@SteveSoCal wrote:
@Tarantado; Don't you think there will be a price drop to accompany the sales drop from the people who hoarded?
Pandemic or not, there's a finite amount of TP that people in the world use...and I would guess that use has gone down the past month. I've become much more aware of my use and no longer use it for things that don't involve the toilet! I'm using more facial tissue and paper towels now.
Quick answer; no. tl;dr: Increased marginal costs (short term costs) will likely be reflected in the end-price for the consumer, as learned in ECON 101.
Price gouging views (and laws) aside and purely from a supply chain perspective, the sudden increase of toilet paper sales (for
reference, 213% sales increase in the second week of March) created an immediate impact in supply the stores, thus creating a shortage. Though it was detailed that people will end up using the same amount of toilet paper regardless, the manufacturers are affected for the very reason that they were forced to ramp up productions during this unusual time. These manufacturers do not have all these extra machines and equipment set aside for these scenarios to make up for shortages, most likely. Thus, with fixed capital, but throwing more bodies at what's fixed to increase production (aka adding more marginal costs via labor), the manufacturers lose in productivity. As a result, unless there are regulations are will FORCE the manufacturers to suck it up and eat the costs (including others in the supply chain such as distribution), the marginal cost increases will be reflected at the end-pricing for the consumer.
The real question in all this is when end-prices are established when
normal operations resume for the toilet paper manufacturers, will the end-price come back to normal too? My opinion and will obviously see it when that time does come around, as long as Q1 and Q2 2020 sales aren't "set" as new targets to exceed and beat without full perspective (an UNUSUAL sales spike fueled by consumer panic), then HOPEFULLY prices for toilet paper aren't affected in the long term in a negative way (inflation due to sales from Q1 and Q2 2020 without adjusting the numbers appropriately).
Very infrequently shopping the Greater Denver Area, Colorado Springs and in-between in Colorado these days.