Prepare to pay up to 25% more for your artificial Christmas tree this year as sellers warn prices are reaching record highs

Woman stands in front of display of artificial Christmas trees
  • Artificial Christmas trees could cost up to 25% more this year, The Wall Street Journal reports.
  • It’s due to the ongoing shipping crisis, which has sent costs skyrocketing.
  • In past years, real trees have been in short supply, too, due to the pandemic and the 2008 Recession.
  • See more stories on Insider’s business page.

Get ready to pay as much as 25% more for an artificial Christmas tree this year.

Companies that make artificial trees and other holiday decor are being impacted by the ongoing supply chain turmoil worldwide: Congested ports mean deliveries of new products are delayed, and soaring shipping costs mean retailers need to raise their prices as well, The Wall Street Journal’s Paul Berger reports.

Balsam Hill, a company that sells trees, wreaths, and garlands, is raising its prices by roughly 20%. A 7 1/2-foot tree that sold for $US899 ($AU1,229) in 2020 will sell for $US100 ($AU137) more this year; a 4 1/2-foot tree that cost $US300 ($AU410) last year will now go for $US499 ($AU682), the company’s CEO, Mac Harman, told the Journal.

Balsam Hill expects its costs to ship products into the US will quadruple in 2021 compared to last year.

“We’ve never raised prices anywhere close to that in our history and will make way less money,” Harman said.

Chris Butler, CEO of the artificial-tree-seller National Tree Company, told the Journal that his company is “fighting to get containers” to import its wares. The company is raising its prices by 25% to account for higher shipping costs this year, he said.

‘Order your Christmas presents now’

The artificial Christmas tree industry is just one of many sectors hamstrung by supply chain issues. A combination of several factors – including labor shortages and pandemic-related work stoppages last year – has led to scarcities in everything from common wedding registry items to golf clubs.

At the same time, skyrocketing shipping costs are leading to price hikes for products like toys and furniture: Toys tend to be low-cost and therefore less able to absorb the increased shipping costs; furniture is bulky and takes up more room in shipping containers.

Scott Price, the president of UPS, recently told AFP that the logistics industry expects these issues to continue throughout 2021 and into 2022.

“I half-jokingly tell people, ‘Order your Christmas presents now because otherwise on Christmas Day, there may just be a picture of something that’s not coming until February or March,'” he said.

There’s been a shortage of real Christmas trees, too

Christmas tree shortage

The shipping crisis might be leading many people to rethink their holiday decor plans – specifically, turning to real trees instead of artificial firs or spruces. But that industry has been hit hard by the pandemic as well, and by the Great Recession before that.

Last holiday season, shoppers snapped up trees in order to create a festive and comforting atmosphere in their homes as the coronavirus continued to surge nationwide. But there were fewer trees on lots due to a confluence of factors: Over-planting in the late 1990s meant that there was an oversupply of trees at the onset of the Recession. At the same time, land was becoming less affordable, and farmers impacted by the financial crisis in turn planted fewer trees.

Since Christmas trees typically take eight to 12 years to reach maturity, that meant the supply of trees dwindled beginning in 2016. It’s also meant Christmas tree prices have risen: Between 2008 and 2019, the median price of a tree more than doubled, to $US76.87 ($AU105), according to data from the National Christmas Tree Association.

While it’s unclear whether the real-tree scarcity will continue in 2021, it seems as though shoppers should prepare for higher prices and tighter supply for all their holiday decor.