Americans are shopping more than ever before, but supply is struggling to meet demand
Did someone order another weird holiday shopping season? Goods stuck on ships, pricier gas and food, fewer sales, workers demanding higher wages, and through it all: shoppers spending record money.
DANIELLE KURTZLEBEN, HOST:
A heads up - it looks like we may be heading for another strange holiday shopping season. Goods are stuck on ships, and stores are struggling to hire workers. But we, the shoppers, we have our lists and credit cards at the ready. So NPR's Alina Selyukh is here to tell us what to expect. Alina, hello.
ALINA SELYUKH, BYLINE: Hello, hello.
KURTZLEBEN: So let's start with the big picture. If there's a headline about this year's holiday shopping season, what is it?
SELYUKH: The headline is that we are shopping way more than ever before. The National Retail Federation is forecasting that Americans are going to spend as much as $860 billion on holiday shopping. That could mean an increase of as much as 10% from last year, which, by the way, was also a record shopping year.
KURTZLEBEN: Right. So we're all spending and spending more, and we know that the pandemic stimulus checks are contributing to that, right? They helped people build their savings. But what else is going on?
SELYUKH: The financial aid was a huge boost. It boosted people's checking accounts. To give you an example, JPMorgan Chase Institute found that halfway through this year, a median family had 50% more available cash than they did before the pandemic. So now we've got widespread vaccinations. Lots of people have started visiting each other. For many families, they're looking at all the spending they haven't done in a while - the vacations they didn't take, the kids' camps they didn't have to pay for - and they are thinking, maybe this is the year we go crazy on holiday gifts.
KURTZLEBEN: Sure, yeah. There's a lot of pent-up demand, but this is also pretty complicated - right? - because there's also higher prices. So is that feeding the record spending as well?
SELYUKH: Well, sure, in the sense that gifts are also costing more. And if you think about sales and discounts, they have not been and probably won't be as attractive and low as you've seen in the past. At some point, of course, that could become a problem for stores. If prices grow too much, eventually things like gas, food, rent, mortgage, other bills would, obviously, take precedence over gift shopping. Here's senior economist from Wells Fargo, Tim Quinlan.
TIM QUINLAN: This is, without hyperbole, the fastest rate of inflation coming into the holiday season in a generation, and that eventually could start to compete with wallet share and consumers' ability to spend.
SELYUKH: But he says for now, shoppers don't seem to be fazed by price increases.
KURTZLEBEN: OK. So we've gone through demand, but we haven't talked about supply. I know I've seen some empty shelves at the stores. What's going on on the supply side?
SELYUKH: The supply side is definitely creating a bit of a recipe for shortages in combination with that record-setting demand.
SELYUKH: You've got stores and warehouses and trucking companies and ports - everyone is saying they need more workers than they're able to hire. For stores and warehouses, they are hiring more seasonal workers this year. And major chains like Walmart, Target, Amazon - they're offering more pay for the work. In fact, retail wages are growing significantly faster than they did in the years before the pandemic.
Meanwhile, almost every other link of the supply chain has something going on, too. Warehouses are bursting at the seams. Companies can't find enough shipping containers and railcars, so retailers have also been getting creative. They're turning some store locations into delivery warehouses. They're being faster about putting returns back on shelves, for example.
KURTZLEBEN: Given all of that, news we can use - how late is too late, then, to start on our holiday shopping list?
SELYUKH: Oh, you're going to hate this answer.
SELYUKH: It depends on what you want to buy...
SELYUKH: ...And how picky you want to be. Generally, everything will vary by location and by store, but definitely some specific things will be out of stock. Adobe Analytics tracks online transactions. They found, so far, triple the number of out-of-stock messages this year compared to a last pre-pandemic holiday season. That's particularly affecting electronics, which have had that long-running chip shortage, but also jewelry and clothes and home and garden supplies.
It's funny, I've been asking a very similar question of all these supply chain experts, and I've found that not one of them has so far finished their own holiday shopping. Every one of them has, however, kept reminding me to always remember the bigger context of all that's been going on. Here's Tony Bell from Rutgers Business School.
TONY BELL: Surprisingly, we have enough that I see in stores and on shelves and everything else considering the fact that we have such a disparity between supply and demand right now. I think we're all doing a phenomenal job (laughter).
SELYUKH: I keep thinking I might just randomly play that little clip back for the rest of the holidays because, you know, experts say we're all doing a phenomenal job.
KURTZLEBEN: That's NPR's Alina Selyukh. Alina, thank you so much.
SELYUKH: Thank you.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.View this story on npr.org
CapRadio provides a trusted source of news because of you. As a nonprofit organization, donations from people like you sustain the journalism that allows us to discover stories that are important to our audience. If you believe in what we do and support our mission, please donate today.