Retailers Expect Holiday Shopping Shortages, Higher Prices

First Insight and Wharton’s Baker Retailing Center study finds that 100% of retail execs agree supply chain disruptions will affect sales, prices, and promotions

Despite September’s better-than-anticipated retail sales numbers, trouble could be on the horizon. Top retail executives have indicated that consumers should expect holiday shopping to be affected by supply chain disruptions and inflation, according to a new survey by First Insight and the Baker Retailing Center at the Wharton School of the University of Pennsylvania.

Fully 100 percent of the senior executives surveyed agree that disruptions will mark the upcoming holiday shopping season, and nearly all (98 percent) agree that supply chain issues will continue impacting the retail sector through 2022 and beyond.

Increased cost of goods and shipping are being handled by retailers in various ways with some trying to mitigate the supply chain costs as we head into the holidays. “Over a third of retailers are absorbing the hit and keeping prices consistent; however, an astounding 59 percent of retailers said they will be passing on the cost to consumers. For this holiday season, we anticipate that consumers are going to bear the brunt of this disruption through increased shipping and product prices,” says Professor Thomas Robertson, Academic Director of Wharton’s Baker Retailing Center.

Greg Petro, CEO of First Insight, said, “Consumers have been conditioned to expect wide availability and lower prices starting with Black Friday and extending through to post-holiday sales. Our research indicates that this year will be decidedly different, and consumers should plan to shop early to avoid disappointment and expect to pay more. Smart retailers and brands are safeguarding margins by optimizing their pricing and promotions based on real-time Voice-of-Customer-data.”

Consumers can expect fewer sales and promotions this holiday season, with 22 percent of retailers saying that they will eliminate or reduce planned promotions in response to lower inventories and higher prices. Furthermore, nearly two-thirds of retailers anticipate a margin hit of less than 10 percent.

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