Retail Effect On The Gross Domestic Product Amid Coronavirus
Updated: May 14, 2020
As the economy grows, the calculation of the gross domestic product only "measures the size of a nation's economy and doesn't reflect on a nation's welfare" (Kapoor, Debroy, 2019). The gross domestic product was created during World War II by the economist Maynard Keynes. Keynes demonstrated that the gross domestic product should be calculated by creating the sum of private consumption, investment, and government spending. However, in modern society, environmental and health concerns take a great place in our everyday life. The gross domestic product would then need to include the environment results and well-being data in addition to private consumption, investment, and government spending.
Amid the coronavirus spread, economists are worried about the impact the virus would have on the economy and are already observing a shift in consumer demand. Over the upcoming months, consumers will be willing to spend more for products that are of higher quality when it comes to safety standards, efficacy, and, more specifically, when it comes to cleaning products, antiseptics, and food items. The consumer is not demanding to have a good product any longer but is expecting to buy products from a reliable and trustable supply chain. As the U.S retail sector will be hit by both demand and supply-chain issues, the consumer's confidence over the virus spread will decrease, which will result in the consumer stocking up in not only cleaning supplies but also in canned food, and toilet paper. Stores like "Target and Walmart could be experiencing out-of-stock issued as they are dependent on a shorter-lead-time replenishment model," Wells Fargo said, adding that there could be empty stores shelves as soon as mid-April.
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