This year, it looks like there’ll be one uninvited guest at your house for the holidays: inflation. The coming holiday season will be one of the most expensive on record given the rising costs of food (a 5.3% gain since last year) and a higher Consumer Price Index (a 6.2% rise since last year). The CPI reached a 30-year high in October, according to the U.S. Bureau of Labor Statistics. Rising inflation might cause the Federal Reserve to continue its policy course. However, according to experts, these bumps are all very normal as the economy gets back up and running.
Supply chain issues continue to be a problem as well. They have persisted throughout the pandemic and have raised the shipping cost of everything. These supply chain issues could contribute to limited supply, as some consumer products, toys, and foods take longer to deliver. The cost to ship containers overseas has soared in recent months. Freight costs could become “permanent inflationary items” and could combine with higher demand for products and transportation, rising labor costs as well as shortages in oil and chemicals, and higher commodity prices.
The price of Christmas trees went up this year,too. Prices will be 5 to 10 percent higher, on average. These higher prices are a result of long-term industry trends along with short-term factors. There are higher costs for fuel, trucking and labor, not to mention severe weather in certain areas. While artificial trees are still popular, demand for live cut trees has gone up during the pandemic as people want a connection to nature in their homes. People should buy their trees by mid-December. Sales for fake trees are scarce as well, so it’s best that everyone stay on top of their tree-buying game this season.
When it comes to Christmas presents, retailers will have to be flexible with their supply chain. Cost of goods has increased, especially in apparel along with the costs of inbound shipping (containers, transportation, trucking distribution centers, etc.). These costs will eventually hit operating profits. Retailers are struggling with how much of the cost they can pass on to customers and how efficient they can be to optimize their performance. What’s important now is that they focus on their supply chain.
Here are some tips for lowering your household costs. Start your holiday shopping early. Consumers are planning on fighting rising costs by going to sales, cutting back on food or guests, and using coupons. People have been stocking up on food for weeks. Look for deals. These will be especially important for people on a budget. Look for sales on any items you can stock up on ahead of time, and compare prices across grocery stores. Split the costs of your holiday meal across all of your guests. Get creative and look for cheaper options.