Don’t wait – start your holiday shopping today
Hiring shortages, fuel spikes, and supply chain disruptions will make buying the perfect gift difficult this holiday season, Wells Fargo economists report.
Not long ago, the scent of fireworks and backyard barbecues made the holidays seem so far away. And now, just like that, we’re well into pumpkin spice season. But there’s still plenty of time to buy gifts and holiday party supplies, right? Nope. A confluence of COVID-19 events is making shipping and shopping a little more difficult, Wells Fargo economists say. “This is a year to start early,” said Wells Fargo Senior Economist Tim Quinlan. “Make a list, but beware — take too long to check it twice and the store may run out of what you want.”
Wells Fargo’s economists and equity analysts cite three reasons for the tough conditions:
- Seasonal hiring tougher than ever: Whether in stores or in warehouses, seasonal labor will be tough to find. According to the latest National Federation of Independent Business (NFIB) survey, small businesses have never had a more difficult time filling jobs.
- Fuel price spikes: Gas prices are higher than they’ve been in seven years and only once in the past 30 years has Consumer Price Index inflation been north of 5% year-over-year going into the holiday season. Prices are weighing on confidence, and when consumers pay more for essentials, that steals wallet share that might otherwise go into holiday spending.
- Supply chain problems getting worse: With 66 loaded cargo ships at anchor off the coast of California, supply chains have never been as strained as they are today. Simply put, it’s going to be harder for the things you want to buy to get from their manufacturing location to store shelves.
“This year will likely be characterized by inventory shortages, store staffing issues, and a lack of drivers for holiday deliveries,” Quinlan said. “Despite all these headwinds, our forecast still looks for holiday sales to post a record gain.”
View the slideshow for tips from Wells Fargo economists and strategists to help you navigate this year’s supply chain constraints.