Ongoing supply chain issues may disrupt retailers’ holiday sales plans, LSU marketing professor Dan Rice says. For many businesses, a successful Christmas shopping season is the difference between turning a profit or not for the year.
“This year, with generally strong spending, shoppers are eager to get back out and spend, and enjoy things that maybe they couldn’t during the pandemic,” Rice says in a Q&A LSU posted Nov. 22. “The interesting issue now will be how much the ongoing supply chain issues may impact sales or potentially limit growth.”
Though major retailers have announced they expect to have full shelves for holiday shoppers, recent supply chain disruptions have included raw materials price increases, fuel price increases, worker wage increases and delays that cost companies. Additionally, Price notes, many sectors are struggling to hire enough workers to handle demand, which leads to higher wages and potentially higher costs to the consumer.
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Online sales have grown significantly during the pandemic, which already was outpacing brick-and-mortar sales growth percentage-wise for the past few years, he says. However, in south Louisiana, where the number of COVID-19 cases has fallen, in-person shopping could be relatively high compared to other areas where the coronavirus is surging.
Price says local retailers also might see “revenge shopping,” where people have a pent-up need to spend money on things they didn’t buy or need during the lockdowns, but could have more use for now that things are starting to go back toward some form of normal (such as business attire for in-person meetings) and fun things to recover emotionally from the disruptions.
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“In Louisiana, we have a lot of people who are still struggling, in some cases literally, to put a roof over their heads with all the fallout from the storms this year,” Price says. “For those families, presumably spending will be much more on necessities and much less on gifts. So while the spending as a national average is expected to skyrocket, there are segments where that will likely not be true.”
You can read the Q&A here.
This story originally appeared in a Nov. 22 edition of Daily Report. To keep up with Baton Rouge business and politics, subscribe to the free Daily Report e-newsletter here.