Cargo ships have been backed up off the coast of California, and Americans are reporting empty store shelves across the country. Last week financial experts warned that Thanksgiving 2021 may be the most expensive one yet, and now they are weighing in on Christmas 2021. The warning is still the same; Christmas 2021 is set to be the most expensive one in decades.
What is to blame for these dire predictions? According to financial services provider Luca Pautasso, public spending and the supply chain crisis have created ” a perfect storm.” Pautasso said many projections have this upcoming Christmas as the most expensive in the last thirty years.
Inflation is rapidly rising, and it’s impacting everyone’s bottom line. While wages are increasing, the dollar is decreasing in value. People have less disposable income, and wage increases are not enough to fight the rapidly rising inflation that has plagued the country for the last year. Pautasso said “it remains to be seen” how the American public will adapt as prices on goods and fuel continue to rise.
Pautasso predicts that Americans will still try to “outdo” around the holidays, even though the supply chain is chaotic and there is no guarantee that highly-desired products will be on the shelves. The global supply chain crisis that has been ongoing for at least a month is affecting the price of everything, including food.
Experts are recommending that consumers shy away from panic buying, pointing out the toilet paper run in the early days of the pandemic. Panic buying will only make matters worse, driving up the cost of the goods that do make it to the shelves and preventing people from getting necessary items.
The White House has already warned Americans that there will be things that people can’t get this Christmas as they have in previous holiday seasons.
Even so, the experts are telling consumers to go ahead and pick up things you might be needing for the holidays, but to avoid stockpiling items. Some experts have suggested that consumers might want to be shopping now for the holidays.
Adaptation is the word that financial experts are using to describe how buyers should be shopping at the moment. “If you go to the store, and they don’t have the exact product you need, then just adapt and buy something different,” says Jennifer Blackhurst, a University of Iowa professor of business analytics.
However, this advice sounds a little like some recent news articles that told Americans to “lower their expectations” and to stop being “spoiled” when faced with staff shortages and supply chain issues in local stores.
The problem often comes for consumers is that we don’t mind purchasing an off-brand or store brand product for a cheaper price; we’re actively looking for ways to stretch our dollars. However, when consumers walk into stores only to find one or two products, no generic brands, with a price that is double or three times what we were paying just a few months ago, we don’t want to adapt nor do we lower our expectations.
Individuals are even reluctant to purchase necessary items online because of lengthened shipping times as well as increased shipping rates.
Blackhurst related to Fox Business that the current ocean freight rates from China to the West Coast of the United States was $3,487 per forty foot container in November 2020. This year, that same cargo container cost a whopping $17,377. One reason that this number has so sharply increased is due to the increase in time it takes that cargo to be shipped and on its way to the stores. According to Frieghtos, an online marketplace based in Hong Kong, shipping time for a product from China to the West Coast has nearly doubled. Last year it took 51 days for a product to get to the US from China. Today, the average is 74 days.