It is going to cost Santa quite a few more dollars to come down the chimney this year.

A perfect storm of price increases shows no signs of letting up as Americans begin to think about their Christmas season shopping.

Two major factors are inflation, and the price increases caused by the total mess in the global supply chain. 

Retailers have advised shoppers to get started on their holiday shopping early to avoid empty shelves and even higher prices further down the road.

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Economic Woes And Inflation

While delays at every level of the global supply chain continue, toy companies like Mattel warn that price increases are coming.

Goldman Sachs researchers say, “Mattel’s price increases in 2H21 will offset cost inflation from supply chain challenges.” 

Some companies are trying to figure out ways to lessen the burden – like shipping their goods early so companies can stockpile inventory.

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Five Dollar Tree?

In what might be a preview of things to come, discount store Dollar Tree announced that the price of some of their items will jump above the one dollar price tag, and even beyond three or five dollars in some areas.

Here again, supply-chain issues have gotten in the way of their typically-cheap prices.

Dollar Tree CEO Michael Witynski stated to the Wall Street Journal, “We rec­og­nize the need to make ad­just­ments in the cur­rent eco­nomic en­vi­ron­ment.” 

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Port Problems

America’s ports are a key part of the shipping bottleneck. KTLA reports that as many as 500,000 containers are awaiting unloading from cargo ships off the California coast. No one seems to know how to solve the problem.

Those who are familiar with the backlog say that more dockworkers are needed. This would speed up wait times for truck drivers waiting on loads to be unloaded and transferred to truckers for delivery. 

Back in August, during her trip to Singapore, Vice President Kamala Harris mentioned possible supply chain issues, “The stories that we are now hearing about the caution that if you want to have Christmas toys for your children it might be the time to start buying them because the delay may be many, many months.” 

The Axios report says that price increases could go as high as 20% this holiday season. While 20% might be insignificant to some, those on a fixed income will feel the pinch when that income has lost 20% of its value.

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Rob Garf, VP and GM at Salesforce says bottom line, “Consumers will likely be willing to cough up the extra cash for some items, while buying fewer items overall.”

 

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