Helping you make wiser investment decisions

What supply chain issues mean for holiday shopping this year

November 10, 2021 Jaclyn Law
What supply chain issues mean for holiday shopping this year


Supply chain problems—including factory shutdowns, labour shortages and transportation bottlenecks—that started in the early months of the global pandemic persist with no end in sight. The result: Massive shortfalls of everything from bicycles and boats to microchips and running shoes.

At the same time, the pandemic has changed consumer behaviour. We’re an instant society now—Amazon Prime and grocery delivery have made us want everything as soon as we hit “add to cart.” Meanwhile, lockdowns and stay-at-home orders have driven up demand for a wide range of goods, causing further supply chain distortions as producers, distributors and retailers scramble to keep up. Throw in a few unpredictable factors—extreme weather, cyberattacks and China’s energy crisis, to name a few—and it’s no wonder why supply chains still haven’t regained equilibrium.

On top of that, shoppers plan to spend 29% more this year than they did in 2020, according to PwC Canada’s latest holiday outlook survey. That means an average outlay of $1,420 (which sounds high but is still below pre-pandemic levels).

Supply chain problems and holiday shopping = Lower stock, higher prices

With so many factors affecting inventory, retailers large and small are urging customers to start shopping now, rolling out their holiday ad campaigns even earlier than usual. It’s not just a sales tactic to widen the shopping season (hello, Black Friday!). Retailers have real concerns about their ability to fulfill orders and whether gifts and packages will arrive on time.

Which goods will likely be hard to come by this holiday season? Industry observers are predicting shortages of toys, electronics, video game consoles, Christmas decorations, board games, books, bikes, clothing, furniture and large appliances. Even if retailers let you pre-order or put your name on a wait list, deliveries are unpredictable. Your gifts might not arrive in time for the big day—buyer beware!

Some logistics firms, distributors and major retailers—including Walmart, Amazon, Home Depot, Costco and many others—are reportedly trying to circumvent supply chain disruptions by chartering their own cargo planes and ocean freighters, at considerable cost.

How much of that will be passed on to consumers remains to be seen, but in general, you can expect to see higher prices and fewer discounts this year. If you find an item that’s a must-have on your list, you may not want to hold out for a sale. Already, three in five Canadians who have started their holiday shopping are having trouble finding what they want, according to a poll by KPMG.

How to ensure you buy in time and get your stuff delivered in time

In addition to shopping early this season, try these strategies to get your hands on the gifts you want without breaking the bank:



Source link