‘Doom Spending’ — navigating the growing uncertainty of today’s retail landscape

Tariffs. Inflation. Recession. Less than six months into 2025, these troubling terms have regrettably become all too familiar to the average American consumer.

As we approach the 100-day mark of President Trump’s second term in office, the administration has imposed a baseline 10% tariff on all U.S. imports — while pausing planned reciprocal tariffs on most countries for 90 days.

The notable exception is China. As the second-largest supplier of goods to the U.S. — with imports valued at more than $462 billion in 2024 — China has become the primary target of these new trade measures. As of April 9, 2025, a steep 145% tariff now applies to all Chinese imports entering the U.S.

With experts anticipating immediate fiscal impacts — from rising prices at home to potential retaliatory tariffs abroad — fears of a recession are growing. And as always, it’s the American consumer who will feel the effects first. So how are shoppers responding?

Coined as “doom spending,” this term describes the impulse to spend money in response to fears surrounding economic or political uncertainty for the future. Looking back at the height of the COVID-19 pandemic, retailers faced significant disruptions to their supply chains as a result of unexpected consumer shopping habits – including rapid product demand increases and resulting product shortages.

Today, doom spending is on the rise once again amid tariff concerns, and has undoubtedly put retailers on edge, posing a new wave of risks to their inventory management and overall supply chain integrity. Amid this new era of economic uncertainty, the difference between success and failure for retailers will depend on their ability to act quickly and leverage the right technology to strengthen their inventory management and better prepare for the short-and long-term impacts of doom spending.

Doom spending as a fear response

Both the newly imposed tariffs and the rationale behind doom spending share a common factor: the incitement of fear.

How long will it take for prices to rise after tariffs take effect? What products will become the most expensive? Similarly to the pandemic, will retailers place limits on the amount of products I can buy? With these questions on the minds of American shoppers, it is no surprise that an increasing number of people are rushing to buy products now before prices inevitably go up.

A February 2025 survey of 2,000 U.S. residents found that one-in-five Americans are buying more than usual, and 42% are or will start stockpiling items – with the most commonly stockpiled items including non-perishable food and toilet paper. 

Rapid stockpiling by consumers inevitably turns into unexpected out-of-stock inventory for retailers. For essential products like toilet paper and food, these sudden stockouts mean retailers are left scrambling to replenish their shelves to avoid lost revenue and potential damage to their reputation. This further underscores the critical need for retailers to enhance their inventory management strategies, ensuring they are prepared to adapt to changes in shopping habits and address the increasing concerns of consumers.

Evaluate, inform and monitor 

The height of the COVID-19 pandemic showed retailers the significant, long-term impacts of unexpected mass stockouts as a result of panic buying by consumers. So, what factors should retailers consider and what essential steps must they take as both they and their customers navigate through this current and upcoming period of uncertainty? 

• Evaluate your current inventory management software While stockouts are not entirely preventable, adopting an automated inventory management system like a POS system equips retailers with the ability to track stock levels in real-time, ensure availability of popular products, automate reordering, and analyze shopping behavior. With direct inventory insights, retailers can identify stockout patterns, including the top products that are being cleared from shelves the quickest.
• Inform your shoppers From online to in-store shopping, keeping your customers informed of potential price increases and changes to inventory is critical. As we are already witnessing today, retailers can anticipate that consumers may initially resort to panic buying. As such, making customers aware when stockouts do occur and providing them with an estimated delivery date of products will be instrumental in maintaining strong customer relationships amid this growing period of uncertainty.
• Monitor customer behavior and supply chain changes One thing both retailers and consumers have learned about the current state of our economic and political environment is that change can happen overnight. From the initial introduction, removal, and reimplementation of tariffs by the U.S. administration, followed by the new retaliatory tariffs by other countries — businesses are expected to adapt to these changes on a dime.

For retailers, monitoring for potential supply chain disruptions – such as a sudden increase in product ordering prior to tariffs taking effect – as well as how customers are responding is key. Monitoring customer behavior can include analyzing sales data, direct feedback from shoppers, as well as conversations on social media. This will better prepare retailers for the steps they need to take to protect and strengthen their inventory management and customer relationships. 

Whether businesses and consumers are prepared or not, tariffs are here to stay for the foreseeable future. As experts anticipate an uncertain time for both groups — and cite the negative impacts this will inevitably have on consumers‚ we are now witnessing the first wave of changes to consumer spending.

What may begin as stockpiling and panic buying for shoppers — risking stockouts and shortages for retailers — can suddenly turn into a complete halt in spending, leading to potential overstocks. 

By evaluating the current systems retailers rely on in their day-to-day operations, keeping customers informed of changes to their businesses, as well as monitoring for potential supply chain disruptions and customer behavior, retailers can better prepare for the unexpected months ahead.