CHICAGO — For months, economists have been warning that supply chain delays were on a collision course with the holiday shopping season. But a new survey reports which retail businesses will be hit hardest and what that could mean for consumers.
Right now, products remain trapped at ports with docked ships unable to unload goods as they wait for truckers to keep the supply chain moving.
The bottleneck means retail businesses are waiting to fulfill increasing demand as the holiday shopping season gets underway.
“Prices are going to skyrocket. They are going to go up,” said Dennis Consorte, a small business consultant with Digital.com. He says specialty stores and grocery stores will be the hardest hit with 3 in 10, predicting 60-90% less inventory than usual.
“There's going to be shortages of inventory. There are going to be shortages across all different sectors of the economy, and ultimately, we're going to pay for it,” he said.
As a result, most retailers say they will be forced to pass those costs on to consumers already dealing with the largest rise in inflation in three decades.
According to a recent Digital.com survey, 53% of small business owners anticipate inventory shortages through the 2021 holiday shopping season. As a result, 58% of retailers say they plan to raise prices by 40% or more.
“For example, chicken breasts, instead of maybe paying three or four bucks a pound, you might be looking at four or five six bucks a pound,” said Consorte. “So, start thinking about what this means and start budgeting accordingly.”
There are a couple of things you can do: shop early before demand overtakes supply, and consider gift cards instead of products.
“Buy the gift card and give it to somebody. They can hold on to that until the prices come down and then they'll get more value for that money," Consorte said.
But that may not help when it comes to sticker shock on certain products. The onset of the pandemic set off a panic buying spree. Everything from toilet paper, gaming consoles, organizing supplies and air fryers were wiped off the shelves.
“Those prices are going up to where instead of spending maybe $10 a month on toilet paper, you could be spending $15-$20 bucks a month on it. Diapers, same thing, and groceries are going to be going up, too,” he said.
Consorte says retailers have to take an active role in fending off a frenzied shopping season.
“Start thinking about sourcing domestically because then you don't have to deal with all of the international supply chain issues that may actually be solved and start thinking about where else you can source," Consorte said.
With inflation already causing pain in the wallet, the frustrations of not being able to find what you need on the shelves could become very real for millions of consumers. So, as always, it’s best to plan ahead.