Understanding the Psychology Behind Panic Buying: A Grounded Theory Approach

Abstract

A psychological phenomenon that has triggered panic buying by the rapid spread of emergent epidemic is worthy of consideration. Population across cultures and national boundaries has raided shops at each growth stage of this epidemic, and India’s fast-moving consumer goods companies have faced increased pressure to ramp up production to meet demand. Limited research in consumer behaviour theory has approached to this collective action of panic buying or in other terms stockpiling. A theory needs to be developed from panic literature to understand this collective action by consumers in an emergency situation. The framework thus developed will facilitate in making economic choices in relative social isolation. This article is an attempt to identify the factors that lead to panic buying in case of pandemic. The research is carried out in stressed circumstances during the lockdown in Delhi and uses grounded theory to obtain insights from 22 consumer goods retail store operators to understand the reasons of panic buying by consumers. The responses have been carefully analysed to propose a model for further testing of consumer behaviour towards panic buying of essential and non-essential items under the pandemic situation.