- A global supply chain crisis is putting the holiday shopping season at risk.
- Retailers are scrambling to get products and some are resorting to stocking last season’s items.
- Experts say we’ll have less to choose from this holiday season, and may have to pay more.
- See more stories on Insider’s business page.
Brace yourself for a less exciting, more expensive holiday shopping season.
As retailers scramble to keep shelves stocked amid a global supply chain crisis, industry insiders say we should be prepared to “settle” when it comes to holiday gifts.
Ken Hicks, CEO of clothing retailer Academy Sports, told Bloomberg that shoppers “will have to settle more because they [retailers] just won’t have as good of a selection.”
Delays and shortages along the supply chain have left mountains of products stuck in factories in Asia or in ports in the US, unable to make their way to stores.
Steve Azarbad, cofounder and chief investment officer of hedge fund Maglan Capital, which invests in retailers, said some companies had resorted to buying products from two years ago to keep shelves stocked.
“I talk to a lot of suppliers, and they’re telling me ‘I just can’t fill all the orders I’m getting,'” Azarbad told Bloomberg.
Toys, which are in hot demand during the holiday season, have been particularly badly hit. One toymaker, Basic Fun, told Bloomberg that around $US8 ($AU11) million worth of its toys were sitting in a factory in China and that it couldn’t move them because of a shipping container shortage.
One of the world’s largest toymakers, MGA International, said it recently had more than 600 containers filled with toys that were stuck in the port of Los Angeles for six weeks waiting to be unloaded.
Falling demand in the first half of 2020, followed by a surge at the back end of the year, has led to delays, port traffic jams, and blockages across the supply chain. The lack of containers and dock workers is only making the situation worse.
“I’ve been doing this for 43 years and never seen it this bad,” Isaac Larian, CEO of MGA, told Bloomberg. “Everything that can go wrong is going wrong at the same time.”
“The installation of raw material and labor has gone up exponentially,” Larian told CNN in an earlier conversation. “We’ve seen a 23% increase in cost of product in China without the logistics. That is going to translate to higher prices with retail.”
Two of the largest toymakers, Mattel and Hasbro, already raised prices earlier in the summer to absorb higher shipping costs.