Pandemic and supply chain issues will make toys and food scarce this holiday season
Brace yourself: It’s going to be hard to find everything – not just your favorite holiday foods and hot toys and gifts, but also staples like coffee and shoes – due to supply chain issues that will persist. probably. at least until next spring.
Why is this important: Scarcity of resources will likely lead to more fights between shoppers in physical stores, fewer Black Friday deals, and online price wars that could threaten the livelihoods of already struggling retailers.
Driving the news: Stores of all sizes and specialties are already trying to stock things up in warehouses – from turkeys, stuffing and cranberry sauce to Halloween decorations, video game consoles and chic woolen sweaters that everyone has. seems to want.
A record number of freighters are detach from key ports like Long Beach and Los Angeles in California waiting to be unloaded, due to pandemic restrictions, labor shortages and record prices for Chinese shipping containers. And big box retailers are taking matters into their own hands.
- Walmart charters its own ships so that it is not at the mercy of overwhelmed vendors – and some of these charters are deliberately small enough that they can unload at secondary ports where there aren’t such great safeguards.
- Home deposit “booked his own vessel, bought goods in the spot market and hauled power tools to deal with supply chain issues,” according to CNBC. President and COO Ted Decker told CNBC it was “the first time the company has taken such a step.”
- Lululemon adds additional air shipments in an attempt to bypass overcrowded ports.
Inventory: MGA Entertainment and Basic Fun, the huge toy distributors behind LOL Surprise! dolls, Little Tikes, Bratz dolls, Tonka trucks, Fisher-Price toys, K’nex and more, say that children’s pleasures like these will be rarer and more expensive, as reported by CNN.
- “There is going to be a serious shortage of toys this year,” MGA Entertainment CEO Isaac Larian told CNN Business.
- “The [shipping[ container that cost $3,200 last year is now $22,000,” Larian told the network, blaming Maersk and other shipping giants.
- Jay Foreman, CEO of Basic Fun, told CNN: “You’re going to find various times during the holiday season where the store shelves are going to have empty holes in them.”
The problems include COVID-19 outbreaks in key Asian supplier countries, severe shortages of domestic truckers and warehouse workers, and wildfires that have closed apparel factories in Bangladesh.
- Vietnam and Indonesia, where stores like Gap and Nike have a lot of factories, are being devastated by the Delta variant.
Between the lines: The global supply chain is so broken that only the biggest stores will be able to obtain and store sufficient inventory â and nobody can predict how long the situation will last.
- After last year’s holiday shopping binge, “the factories quickly sold out of their inventory and, frankly, everyone is still playing catch-up,” says Brittain Ladd, chief supply chain and marketing officer of Kuecker Pulse Integration (KPI), which helps companies like Amazon, CVS and Walgreens automate supply chains and fulfillment centers.
- “Everyone is crossing their fingers that this works itself out by spring of 2022,” but there are no guarantees, Ladd tells Axios.
What’s next: Humanoid robots like Digit from Agility Robotics may one day be able to compensate for labor shortages.
- Digit the robot, which recently went on sale, is supposed to be able to handle last-mile deliveries and warehouse jobs â it can climb ladders and pick up boxes.
- Ford is its first customer, per Business Insider.
The other side: Consulting firms are pumping out rosy spending projections for the coming holiday season.
- Mastercard predicts this will be “theÂ most wonderfulÂ holidayÂ retailÂ season on record,” with retail sales growing 7.4%Â (excluding automotive and gas).Â
- Deloitte pegs the increase at between 7% and 9% and says “e-commerce sales will grow by 11% to 15%, year-over-year,” to $210 billion to $218 billion this holiday season versus $189 billion last year.
- Per DealAid: “Consumers plan to spend $974 on average [a 4.7% increase versus 2020] during the holiday season this year. “
The essential : “What I hope consumers have already started doing is shopping, “Ladd says.” Consumers should really understand that of all the seasons they’ve been through, they really need to start this one soon. as possible. “
- He cautions, âI don’t think they should be putting their hopes up in the big toy or the big fashion item that might come up. The attitude should be, ‘Let’s not be as picky as we may be- be been in recent years. Let’s be happy with what we can find. ‘”