Effect of Covid 19 Protocols on Consumer Goods in Ado Ekiti. A Study of Tomato Consumers in Ado Ekiti
ABSTRACT
A global crisis struck the world in the shape of the COVID-19 pandemic at the beginning of 2020. As a result, supermarkets have experienced panic buying behaviors, empty store shelves, out of stocks, and a large increase in online sales. Supermarkets, producers, marketers, and businesses have had to adapt to consumers’ changed buying behavior in food consumption. In previous research, it has been found that price and quality are two of the most influential factors in the consumer decision process, in particular, increased price sensitivity and perceived quality of food products concerns consumers in crisis situations. The aim of this study was to research beyond panic buying behaviors, by investigating if consumer buying behavior has changed towards tomatoes during the COVID-19 pandemic. A moderating effect of consumers in Ado Ekiti was tested. A quantitative method has been used, in which consumers in Ado Ekiti were surveyed. 169 responses from consumers were analyzed. The result showed that the Covid 19 protocols has had a negative impact on the consumption of tomatoes in Ado Ekiti market. The findings in the study create a foundation in a unique crisis situation that has never been studied before and the exploratory nature of the study gives multiple indicators for future research.
CHAPTER ONE
INTRODUCTION
- Background of study
The coronavirus outbreak, which now is more referred to as Covid-19 as a shortened version of “coronavirus disease of 2019”, first appeared in the region of Wuhan, China. The virus spreads incredibly quick between people and in just a few months, tens of thousands of people worldwide have become infected (Mph Online, 2020). Furthermore, as the Covid-19 outbreak spreads, companies across the world are also getting affected by it. Some of the world’s biggest companies had negative effects such as manufacturing being disrupted, stores being empty without consumers, and flagging demand for their wares (Eavis, 2020). Some companies may also struggle because of their investors being more reluctant to lend them money after the outbreak (Eavis, 2020). Some of the most hard-hit sectors include airlines, leisure, and hospitality. Bars and restaurants are also being heavily affected (Fraser, 2020).
This pandemic has become the biggest threat to the global economy and financial markets as China, North America and Europe have been the most hard-hit markets and the Organization for Economic Co-operation and Development (OECD) have downgraded its 2020 real GDP growth projections for almost all economies (see appendix A) (Nee Lee, 2020). Furthermore, some countries are starting to put their citizens on various forms of lockdown to slow the spread of the virus. These include national quarantines, school and work closures (Kaplan, Frias and McFall-Johnsen, 2020).
Nigeria is in an emergency food and nutrition insecure situation, according to a September 2020 report by the Food Security Information Network (FSIN) and Global Network Against Food Crises. There are an estimated 32.1 million people in Nigeria who are currently either in a stressed, crisis, or emergency food-insecure situation, the number of people who cannot access and / or afford safe, nutritious foods is even higher. Before the COVID-19 pandemic, there was already an existing gap in the Nigerian food system, which led to the importation of food items to augment local production in order to meet local demand. The pandemic has further disrupted each segment of the food supply chain, but the effects are different along the rural-urban continuum. More urbanised areas may be harder hit than remote rural areas if connectivity remains broken down, as most food is produced in rural and semirural areas.
At the onset of COVID-19 A number of supply chain network challenges existed pre-COVID-19, such as low installed capacity at seaports, high import costs, logistics bottlenecks, poor infrastructure, government policies, and poor technology adoption. A study by PwC (August 2020) concluded that government COVID-19 measures impacted logistics and supply chains for food and agricultural inputs/outputs, as well as halted food production and agricultural activities. In an interview carried out by Reuters (Lagos), several farmers in Benue State highlighted that although demand was high across the nation, crops were rotting in fields or at depots due to logistical challenges. In addition, access to inputs, especially seeds, was hindered. Mobility restrictions and lockdowns disrupted processes involved in the valuation and release of new seed varieties, as well as the timely production of early generation seed and the planning of its supply. This challenge was faced despite the government’s efforts to disperse seeds where they were needed the most. Ultimately, mobility restrictions also impeded seed producers’ access to agro-inputs and mechanisation services, despite government efforts to disperse seeds to farmers.
Many food SMEs already showed signs of disruptions at the beginning of the pandemic. For example, in April/May 2020, all 50 SMEs interviewed in a survey by GAIN recorded lower sales and were worried about current cashflow and the ability to pay salaries and repay loans in the short term. 30% of food SMEs saw a need to diversify their supply chains (e.g., work with more suppliers) and nearly 65% were exploring new business areas as a result of the COVID-19 pandemic, such as digitising operations, diversifying into other sectors, and considering new business strategies and new product ranges. While easing of restrictions alleviated some of these challenges, food system SMEs still are hampered by the losses incurred in the first months of COVID-19.
In addition, the behavior in the supermarkets changed. During the outbreak of the coronavirus, supermarkets dealt with rushing masses of people, empty shelves, long queues at the cash registers, and discussions among customers to get the last products. People started panic-buying water, rice, pasta, frozen goods, and toilet paper. Supermarket chains and experts from the food retail sector assured their customers that there would not be a shortage of food.
This is what Adach (2020) regard as the COVID-19 business world that marketers must strategically plan to effectively respond to by deliberately rising to occasion and intense pressure of swiftly providing and delivering the products, brands, goods and services (like household staples and health-related goods, such as groceries, bottled water, hand sanitizer, toilet paper, face masks, etc.) that consumers desire or crave for in these times of the COVID-19 outbreak, using technology as a strategy to increase retailing without physical contact in this period of isolation (Meyer, 2020). In other words, the adoption of agile marketing which Kalsi (2020) says has soar from 32% globally, would help businesses meet up with changing their short, medium and long-term marketing plan and marketing campaigns in line with current realities like flexible payments, remote work and shifting priorities expected to change consumer buying pattern and behaviour, response to unprecedented obliged them to protect frontline workers task marketers ingenuity, as well as dip business output (i.e. performance, profit and patronage).
Furthermore, the COVID-19 crisis has tested departmental stores abilities to pivot swift or staff with personal protective equipment (PPE) as safeguards for the at-risk customers who on and offline access, buy and receive goods and services from these retailers. Kahle and Close (2011) stated that understanding purchasing and consumption behaviour is a key challenge for marketers. As this begets consumers knowing the products and services to purchase and consume at any particular point in time (Minton & Khale, 2014). Also, Team (2020) reiterate that consumer buying behaviour entails the series of on and offline actions (via technology and physical presence respectively) taken prior to consumers’ changing their preferences or leanings for the demand and purchase of certain staple products (like groceries, diapers, cosmetics, detergents, etc.) or services. The “Click and Collect” model was also inserted in small shops, where the needed products could be chosen online and then picked up directly in the shop, which saved delivery time and made it possible to order fresh products (Spar, 2020). In Nigeria, supermarkets were advised to mark the grounds to assists consumers to keep a distance of 2 meters and plexiglasses were also used in many cases, besides this, there were no other notable restrictions for the supermarkets or their consumers such as mandatory use of face masks and gloves (Folake, 2020). On their own initiative, multiple supermarket chains in Sweden decided to have exclusive opening hours for those above 65 years old and people in risk groups (Folake, 2020).
- Statement of problem
Businesses are consistently or continuously exploring strategies like market research, product brand and friendly pricing regimes in order to advantageously position or situate them designing effective systems and practices which they could leverage to edge-out or outshine their fellow competitors and enhance consumer loyalty, patronage, and buying behaviour in favour of their brand, store or outlet’s increased profit or business even during crisis period. In specificity, a crisis like the novel COVID-19 pandemic which has necessitated remote, restricted and closed work rules or guidelines alongside businesses (like departmental stores) shifting priorities towards adopting ecommerce and total retail industry M&A deals that increased in February 2020 to a net worth of over $2.05bn globally (Kalsi, 2020). Also, conceiving ecommerce is said to enable departmental stores to stay afloat without experiencing the business acquisitions and mergers which has already commenced with the recent acquisition of AR technology startup, Next VR for a $100 million by Apple, which is a contemplated post-COVID-19 economic fallout that may well be worse than the Great Depression (Motti, 2020).
Despite, the novel or unique nature of the origin, spread, threat, and modus of the COVID- to innovate or update steps, techniques, systems and strategies to maximally swell up their reach, 19 pandemic or epidemic which has dropped retail sales at 8.7% in the month of March, 2020 due to stringent actions like market shutdown and border closure (Helm, 2020). Businesses continue patronage and profits by identifying the essential needs (like food, groceries, medicines, sanitizers, face masks, etc.) required to benefit their customers. Thus, the innovations designed to promote product and brand loyalty is considered a modern business development strategy that could enhance business profits amidst emergency policies or programmes like market shutdown and border closure which seems plausible to truncate or slow down businesses, reduce production and economic activities, yet businesses or firms like departmental stores have devised means and integrated activities that could maximize investment profits in the midst of this global pandemic.
Furthermore, there abound to be uncertainties surrounding the influence these specific emergency policies would still edge them among competitors, enhance brand loyalty, customer patronage, sales, and profits beyond the pandemic wherein such measures of stimulating consumer buying behaviour was instituted. And at the same time ensuring that strategic planning guides the emerging consumption pattern in order not to encourage wastage thereby, jeopardizing the future and viable use of resources for a sustainable post-COVID-19 economic development of the state and country (Ibbih & Siyan, 2018). Previous studies focused on student’s consumption pattern and financial management (Vijayalakshmi & Milcah, 2017), that by Kalsi (2020) examined the effect of COVID-19 on consumer behaviour of Apple products. Not much study was directed towards departmental stores or retailers. It is based on this premise that this study attempts to examine covid-19 effects on consumer buying behaviour of tomatoes in departmental stores in Ekiti State, Nigeria.
- Objectives of study
Specifically, the purposes of this study were to determine:
- the influence of market shutdown on consumer buying behaviour of tomatoes in stores.
- the contribution of border closure on consumer buying behaviour of tomatoes in stores.
- the influence of consumer consumption pattern on the variables of COVID-19 and consumer buying behaviour of tomatoes in stores.
- Research Questions
The following research questions guided this study:
- What is the influence of market shutdown on consumer buying behaviour of tomatoes in stores?
- What is the influence of border closure on consumer buying behaviour of tomatoes in stores?
- What is the influence of consumer consumption pattern on the variables of COVID-19 and consumer buying behaviour of tomatoes in stores?
1.5 SIGNIFICANCE OF THE STUDY
The outcome of this study and its completion provides insight on the impact of COVID-19 guidelines on the consumer buying behavior towards tomatoes in Ado Ekiti. Beyond that, the result will illuminate the financial implication of the lockdown and the fragility of food stores to external environment constraint. Also, the outcome of the study further reveals the consumption pattern of residents in Ado Ekiti in relation to the Covid 19 pandemic. The results also provide evidence on businesses’ expectations about the longer-term impact of COVID-19, as well as their perceptions of relief programs offered by the government.
1.6 SCOPE OF THE STUDY
The present study covers the various conceptual aspect bordering COVID-19 and its effect on consumer goods in Ekiti state, Nigeria. The study will cover the markets in Ado Ekiti. The geographical scope is selected by the researcher as it is close to her base of study, which is the Edo state University and as such offer easy accessibility and convenience.
1.7 ORGANIZATION OF THE STUDY
This study is organized into five chapters. What constitutes each of the chapters is explained below:
Chapter one covers the background of the study, statement of the problem, objective of the study, research questions, research hypotheses, significance of the study, delimitation of the study, organization of the study and finally definitions of significant terms.
Chapter two deals with the literature review which is organized in the following themes; Economic Crisis and covid-19, COVID-19 Spill-over to the Nigerian Economy, Using Monetary and Fiscal Policy Measures, Structural factors that Worsen the Economic Crisis, Consumer goods, consumer behaviour.
Chapter three presents the research methodology by considering the research design, area of study, sources of data collection, instruments for data collection, population of the study, sample and target population sample size sampling procedure data collection and analysis techniques to be used.
Chapter four deals with data analysis, presentation, interpretation and the discussion of findings.
Chapter five presents as summary of the findings of the study conclusions and recommendations.
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