shortage. This word is one of the most sounded for a few years. The first time, in Spain, was with the outbreak of Covid, which caused many to rush to supermarkets to buy and stock up on everything they could (especially toilet paper). But something similar has also happened with the war in Ukraine (encouraged by the stoppage of carriers in protest at the rise in gasoline). But, why is there a shortage? What causes that in times of crisis like the ones we have told you about, people go to supermarkets to buy more than they had thought?
Today we are going to talk to you about this term, what it means, the causes for which it occurs and the effects that it can cause (and does cause), in addition to talking about some current examples of how a shortage is created.
What is shortage
According to the RAE, when we look for the definition of shortage, it tells us that it is:
Lack of certain products in a commercial establishment or in a population.
In general, we could say that A stockout occurs when products are missing from a store or city. It does not have to be of several products, but being one, it is already considered as such. That is, there is a greater amount of demand than supply, there are more people who want that product than existing products.
Normally, the shortage disappears naturally since as the demand is satisfied, there is less to deal with and in the end, sooner or later, it is finished. But there are times when, as they are perishable products, or they run out quickly, it can last longer.
Shortages occur in all sectors, from food to clothing, health (drugs), electronic products and accessories, etc. And in addition, the fact that there is a shortage of a product can lead to more problems related to it. For example, if there is a shortage of flour, certain recipes cannot be made if this ingredient is not available; and those that could be made would inevitably rise in price.
Why is there a shortage?
There are many reasons why, at a given moment, a city, supermarket, pharmacy, etc. may experience a shortage. Although the factors that intervene and cause this situation are several:
- On one hand, price control. It may happen that it is the Government that sets a lower price than the market price, and that people want to buy at that price, thus exhausting the supply of those products.
- On the other hand, the increase in demand. In other words, the population suddenly demands a specific product, either because it has become fashionable, because it is mandatory or for other reasons (such as crises, pandemics, wars, etc.).
- Lastly, there could be a drop in supply. In other words, fewer quantities of a particular product are produced.
Consequences of shortage
It is clear that shortages not only cause a lack of products, but, as a consequence, more added problems appear that we often do not relate to this main one.
One of the most common is the black market. In other words, it is being able to access those products that do not exist, but at a higher cost. An example of this was the masks. As there was more demand than supply, the black market emerged to sell them at much more exorbitant prices, which caused much more to be paid for them.
Another consequences of shortages is rationing. And we have the best example of this with the most current initiative, that of sunflower oil. Now, when you go to buy Mercadona as well as other supermarkets, they tell you that only one five-liter bottle per person will be allowed. In this way, they ration the reserves they may have in order to reach more people.
Finally, another of the problems generated by shortages is a forced saving. Since there is no possibility of buying that good or service, what is done is not to spend the money, so it is forced to save. Now, this is not really the case, since we return to the beginning, to the so-called black market, so that forced savings can become an even greater expense because more is paid for that product.
How to solve the shortage
After knowing why there is a shortage, governments must fight to put an end to it in the shortest possible time. But not only the government; also the companies themselves, especially if they have been the ones that have caused this.
In general, and as we said before, shortages usually disappear naturally. But really, it's because Actions are taken to avoid the problem. For example, if a company suddenly cannot meet the demand for a certain product, it usually allocates more resources and personnel to meet that demand, increasing production.
In the case of medicines, consoles, video games, etc. this is done because it is the solution to avoid the problem. And the same in other sectors such as food, textiles, technology, etc.
Another performance by the Government, is to regulate the prices of these products so that everyone can reach them, or limit purchases to x items per family or per person (what would be called rationing), something that is often applied in many supermarkets.
Stockout Examples
We are going to comment on two examples from recent years, with which it will surely be clear to you what shortages are and why they exist.
The first has to do with the toilet paper. When the coronavirus virus jumped in Spain, there were many who destroyed toilet paper. Cars and cars with this "precious item" in such a way that when others wanted to buy they were surprised that there was a shortage of this product, because they did not give enough to have stocks, which were quickly exhausted. What happened? Well, the production of this product was increased and after a few weeks there was enough for everyone (and there was even plenty).
Another example is the sunflower oil. Due to the war in Ukraine, and this being the main producer of this oil, all the alarms went off and many were overwhelmed by it. But the supermarkets quickly put a remedy to ration the stocks they had, prohibiting the purchase of more than 5 liters per person. With the stoppage of carriers there are many more products that are out of stock right now, but, as in the first example, it will end up naturally.
Has it already become clear to you the reason for the shortage and all that it implies?