The economics of supermarkets in snow storms

Bryan Caplan raises an excellent puzzle, following his visit to the supermarket (I can confirm similar observations, even earlier in the day):

They were out of milk and bread, but there was still plenty of cheese and chocolate.  That was easily explained – people knew they could shop again in a few days, so they only needed to stock up on staples.  But the more I looked around, the more puzzled I was.

Here's what I noticed: For any given type of product, the most popular brand always sold out first.  There were no Eggo waffles, but plenty of Wegmans brand waffles.  All the national brands of hot dogs and sausages were gone, but there were plenty of obscure sausages still on the shelves.  If you broadened the categories, the pattern remained.  In produce, all the bananas were gone, but there were still plenty of apples.

You might say, "What's the puzzle?  Of course the most popular stuff sells out first."  But that's a feeble explanation.  After all, if X is ten times more popular than Y, then you'd expect stores to simply carry ten times as much X as Y.  Why would X sell out faster in a blizzard if stores have already taken its greater popularity into account?

I see it like this.  When visits to the store are in "normal times," the store weighs "mass goods" vs. "niche goods" when stocking the shelves.  Some niche goods will be given shelf space because they get some minority of customers into the store in the first place.  (I go to Whole Foods for Spelt Flakes, two or three key cheeses, and my favorite dark chocolate.  While I'm there, I end up paying the higher prices for their milk and green peppers, neither of which is better for me than competing products at Shoppers Food Warehouse.)  If the store stocks too few niche goods, it attracts too few niche-oriented customers and loses money on milk, meat, etc.  

Note also that the niche buyers tend to hold stocks of their favored goods, so if they have a sudden, unexpected supermarket trip, they don't necessarily need to buy more.

Enter the snowstorm.  People are forced to visit the store, more or less.  The previous calculations of mass vs. niche goods are no longer appropriate for the new emergency.  The store, temporarily, would prefer to have more mass goods and fewer niche goods.  The niche goods served the function of "motivating 47 visits a year rather than 23" but in the new short run they are nearly useless for this purpose.  We will see too many of them left on the shelves.  

Read Bryan's comments section as well.  I pondered the "rate of restocking" answers, but slow turnover and slow inventories imply a higher profit margin (if the product can compete for shelf space) and I believe for this to work it has to invoke customer heterogeneity in some manner, as I have done above.

Addendum: Imagine the same problem in the context of a book store.  There is an emergency edict which requires everyone to read three newly purchased books over the next week.  Borders will be swamped, They will end up short on bestsellers, not their niche books.


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