Christmas 2021 cancelled?
No matter what your reasons for celebrating it, the Christmas festive period is one of the most celebrated holidays of the year in the Western World. It’s a time for families and friends to come together, for grown-ups to spoil the kids, and serves as a period of both celebration and reflection.
Last year, celebrations were more muted and isolated than usual as most countries were in the grip of a second wave of the Coronavirus pandemic and households were locked down or experiencing severe restrictions limiting interaction between households, families and friends.
In 2020, most people were fortunate enough to create the illusion of a typical Christmas as all of the usual products associated with the holiday season were still available – Christmas trees, decorations, the traditional Christmas culinary fayre, and a wide range of toys and gifts. The only thing missing last year was the people to share it with – but at least you could always video call your family and friends to create the impression of a family occasion.
So, now we’re one year down the line, its September and shops and stores are starting their annual push for the festive season, and no doubt some people will complain that Christmas promotions are already hitting the high street and that “Christmas seems to come earlier every year!”
It almost sounds like we’re back to ‘business as usual’. We may still be in the grip of a global pandemic but this year we will be able to celebrate Christmas with family and friends as lockdowns appear to be a thing of the past and travel restrictions continue to ease, right?
Well, don’t get your hopes up – your Christmas has never been more under threat! If you don’t take note and act now Christmas 2021 could be cancelled.
The threat to your Christmas in 2021 is real and it’s a complete reversal of factors from last year. In 2020, you could have all the Christmas trimmings but no one to celebrate with, and this year you will have lots of people to celebrate with but none of the traditional trappings of Christmas due to extreme global shortages and disruptions to the supply chain and distribution networks.
Global supply chain still in crisis:
From the onset of the coronavirus pandemic supply chain systems around the world were thrown into disarray as many vessels were halted and shipping containers stayed put. The number of “blank sailings” – cancelled journeys – shot up, leading some ports to become congested with containers.
Chinese container yards and factories were “teeming” with containers that needed to be transported to EU, and UK, ports and those in the US. Shipping containers have piled up in the wrong places, either waiting to be unpacked or sitting empty. Production of containers themselves has also slumped.
As firms restart after the worst of the Covid-19 pandemic, demand for shipping containers is rising, pushing up costs. Problems transporting goods from China have left firms of all sizes facing massively inflated freight costs, while the more recent spread of the delta variant is impacting the movement of goods around the world causing months-long shipment delays.
Retailers like Walmart and Amazon have been scrambling to get space on shipping containers. Some firms have reported having upwards of 200 containers-worth of stock sitting in China, but they can’t get the containers to transport them and are only managing to ship half the volume of stock achieved in previous years.
While a series of pressures have combined to cause the potential Christmas crisis, the extraordinarily high costs and limited availability of the shipping containers needed to bring stock from manufacturing bases in Asia are the main issues.
Industry figures said the costs of securing a container had risen by between 10 and 15 times over the last year. Shipping a 40-foot container from China to the UK historically cost about $1,500 (£1,000), but today costs ten times that.
While rising prices have led some importers to delay their orders, even those willing to pay are often not able to secure a container. Some importers have paid an excess of $30,000 just to get a container on to the ship. But even if importers agree to pay a premium, there’s no guarantee their goods will end up on a ship because there just aren’t enough containers out there.
In many cases, retailers are adjusting by bringing in goods via air rather than shipping, but air freight has always been far more expensive than sea freight.
Many major retail chains have been trying to hoard stock to head off supply problems, but there is a limit to the warehouse space they have available and don’t have warehouses big enough to hold a full demand of stock making stock shortages inevitable.
Worker shortages:
In the UK, the ongoing issue of worker shortages has been caused by a mixture of coronavirus delays and post-Brexit rules. Retailers are grappling with a shortfall of around 100,000 HGV drivers, causing supermarket shelves to be stripped bare, while restaurant chains like McDonald's and KFC have been forced to take some items off the menu.
Recently, the boss of Iceland warned ongoing delivery issues due to worker shortages could effectively "cancel" Christmas, as supermarkets struggle to replenish shelves.
Industry estimates put the shortage of workers needed to drive lorries, handle goods in warehouses and pick fruit and vegetables at hundreds of thousands. Company bosses and trade groups are now warning that if ministers refuse to allow more EU workers into the UK, they risk a deeper crisis this winter.
The number of Romanian and Bulgarian workers in the UK, who would typically fill lower-paid logistics and food production roles, has plunged by almost 90,000, or 24% since the end of 2019. Meanwhile employees from eight eastern European countries, including Poland and the Czech Republic, have fallen by more than 100,000, or 12%.
The US is also facing an unprecedented labour shortage. On Thursday of this week Walmart decided to give more than half a million of its employees raises of at least $1 in the latest move to try and shore up its employee base heading into the ever-important holiday season.
Big box retailers like Walmart routinely bring on tens of thousands of temporary workers for the holidays, but this year will see increased pressure to retain labour in the midst of a historic, country-wide labour shortage that has been spurred by 18 months of "free" government stimulus.
Last year heading into the holidays, Target provided a coronavirus health plan and paid workers $15 an hour. This year, retailers will try to one-up each other even further to draw the attention of a decreased labour pool. Walmart's U.S. average hourly wage now stands at $16.40 per hour.
Both Amazon and Walmart are about to make massive pushes to add more than 55,000 and 20,000 employees, respectively. Amazon is looking for corporate and technology employees while Walmart's hiring is focusing on supply chain.
Toy, gift, and clothing shortages:
UK toy shops have already issued an alarming plea to parents, if you know what your child wants for Christmas – and you want to avoid the most frenetic scramble for presents in years – buy it now and hide it in a cupboard.
Seasoned figures in the UK toy industry have stated that consumers will face higher prices and greater scarcity on the shelves this Christmas because of a “perfect storm” of economic pressures that have disrupted their plans. Despite their best efforts, they warned it was already too late to resolve the bottlenecks in time for this year.
“I don’t want to be alarmist,” said Gary Grant, founder of The Entertainer chain of toy shops, “but I can say that there’ll be more hunting around for things at Christmas than there has been for a good number of years. My advice would be, as soon as parents know either what they want to buy their children or what their children are already asking for, if you see it, buy it. Buy it and hide it to avoid disappointment.”
“There will be stock, but it’s not one of those years where you can just leave it until the last minute and think it will still be there. Get it when you see it.”
“There will never be a toy shop without toys at Christmas, but that isn’t the point,” said Grant. “Children don’t want any toy. They want the toy that they want. Therefore, it will be much more challenging this Christmas to ensure the full availability of all toys.
Normally new Christmas toys come out in June or July, allowing retailers to get a read on how popular they are and can then order more in October and November. This isn’t possible this year as deliveries are already late.
And the US is in a similar situation. More than 1 million Rainbow High dolls are primed for the holidays, but first they need to make it out of China.
“I’m afraid there is simply not enough time to get products on the shelf this year,” said Isaac Larian, chief executive of MGA Entertainment, the toy giant behind Rainbow High and such popular lines as L.O.L. Surprise and Little Tikes. “The holidays are going to be very tough and, frankly, a lot of families are not going to be able to get the toys they want.”
MGA Entertainment has already raised toy prices, though Larian says it hasn’t been enough to cover ballooning expenses.
Two of the nation’s largest retailers, Walmart and Home Depot, are chartering their own ships to retrieve their products, while Amazon is beefing up its fleet of cargo planes. Urban Outfitters is switching from ocean freight to air in hopes of bypassing clogged ports in the run-up to the holidays.
Other brands are recalibrating to avoid the frenzy: Book publishers, dogged by paper shortages and shipping delays, are pushing autumn releases into early next year.
Store shelves already are sparse: At Walmart and Williams-Sonoma, executives say more items are out of stock than usual. Apparel chain Anthropologie is running low on dresses and jeans. Many retailers are whittling down their toy and clothing inventories, offering fewer styles, colours and sizes.
Mattel, the toy giant behind Barbie and Hot Wheels, is raising prices in coming months, and retailers as varied as Abercrombie & Fitch and Best Buy are tamping down on promotions. Analysts say others may start adding covid delivery surcharges, especially for bulky items like furniture and exercise equipment that cost more to transport. And as more retailers rely on airfreight — which costs about 10 times as much as ocean transport — they’re likely to pass on at least some of those expenses to consumers.
Which gift items will be in short supply this year?
The must-have toys topping children’s Christmas wish lists have not yet emerged so retailers and manufacturers are still unsure which items will sell out. They will be keeping a close eye on the best-selling toys and games in the coming weeks and by October it should be apparent where shortages might be seen. However, some of the toys and other products estimated to be in short supply include:
L.O.L. Surprise! Dolls
Paw Patrol vehicles
Little Tikes toys
Peppa Pig, Harry Potter, Star Wars and other popular licensed toy brands
Fidget popper stress relievers
General consumer gift items
Games consoles
Computers, laptops, and tablets
Household electronics
Garden furniture
Christmas tree shortages:
The UK could also face a Christmas tree shortage this year, that experts warn will bump up the demand for artificial trees.
According to Christmas Tree World, a lack of HGV drivers coupled with Brexit and the worldwide pandemic may see retailers struggle to 'fulfil the demand for real trees' over the festive period.
While it's too early to predict, Ben Wightman, an analyst at Christmas Tree World, said the shortage could bump up sales for artificial styles.
One festive retailer, Balsam Hill, has already seen sales of artificial Christmas trees up by 73 per cent in August compared to last year. Visitors to their website has risen by 145 per cent, with searches for Christmas trees booming. Mac Harman, founder CEO of Balsam Hill, said: 'It's clear that the UK is looking ahead to festive celebrations even earlier than usual. With trees and decorations being snapped up even earlier than in 2020, Christmas 2021 looks set to be one of the most anticipated and special we've ever had.'
In the US, the Christmas tree shortage is also causing problems for local vendors, and that could affect this year’s selection and prices. Several factors have gone into the Christmas tree shortage, including some nurseries not planting as many trees due to an expected decline in demand.
Vendors in the Midwest are now looking for new sources to get their trees, some have gone all the way to Canada to source trees. But even with vendors getting trees from new places, buyers can expect to see less inventory than years past.
With the shortage and the cost of transporting the Christmas trees from other locations, buyers should expect prices to be up to 30% higher.
Turkey shortages – no clucking joke:
There are fears Brits may have to go without turkey this Christmas if supply chain issues continue. A warning was issued by Mark Gorton, managing director of Traditional Norfolk Poultry, who said the poultry industry is at crisis point.
The poultry industry in the UK employs more than 40,000 people but there are nearly 7,000 vacancies. The shortage means some poultry producers have reduced the size of their product ranges and cut weekly output by up to 10%. The supply of turkey is down by a similar amount but could decline by as much as 20% at Christmas as firms fear they will not be able to draft in the usual number of seasonal workers.
In the US, as demand for Turkeys increases in the run up to Thanksgiving, the US poultry industry is also voicing concerns over supply with many retailers predicting that they will only be able to source around 50% of the usual supply over the holidays.
These warnings are just the latest in a string of meat shortages that have rocked the US, amid the rising cost of raw supplies and a severe labour crunch.
Other Christmas food shortages:
On both sides of the pond producers and retailers of other typical Christmas staples are issuing supply warnings, preparing consumers for empty shelves over the festive season. Recent supply warnings have included the following festive food items:
Cranberries
Pigs in blankets
Ham, gammon and other pork products
Seasonal vegetables
The cost of Christmas 2021:
The average American spends around $1,000 on Christmas, whilst the average Brit spends approximately £1,100.
Whilst manufacturers, distributors, and retailers are trying their hardest to absorb many of the increased costs due to the current crisis, inevitably, consumers will ultimately face more price increases.
A recent survey found that 62% of retailers and wholesalers expect their prices to rise in the run up to Christmas, and 59% of manufacturers expect to increase prices due to the current global crisis.
It’s estimated that, for the products that actually will be available, consumers could face price increases ranging from 10% right up to 100% - depending on the product.
For anyone on a strict limited budget, this will inevitably mean going without many of the usual Christmas items. And for those who can afford it, Christmas could potentially cost double the usual amount.
As research suggests that in any ‘normal’ retail cycle, 21% of consumers go into debt to pay for Christmas, experts are advising constraint this year.
So, what can you do to try and have a normal Christmas?
Don't wait until the last minute.
It could take longer for items to reach you, and you might need to hunt around for them even more than you're used to.
You should also pay attention to what retailers are saying about what's in stock and where items are available. Retailers will often include in online listings how much of something is in stock, or if the item is only available in a physical store, which can help you plan ahead to make sure you can get your hands on the gifts your family and friends want.
Remember: It might be harder to score certain items this year than it has been in the past. Starting now certainly won't hurt.
