Retailers expect supply chain woes to run through 2022 – and beyond

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Pittsburgh – Top retail executives 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% of the senior executives surveyed agree that disruptions will mark this year’s holiday shopping season, and 98% believe that supply chain issues will continue impacting the retail sector through 2022 and beyond.

Strategies to mitigate added supply chain costs vary. Over one-third of retailers are absorbing the increases and keeping prices consistent. However, 59% of retailers said they will be passing on the cost to consumers. Just 2% said they adjusting product construction to lower costs, and another 2% said they were not anticipating price increases.

“For this holiday season, we anticipate that consumers are going to bear the brunt of this disruption through increased shipping and product prices,” said 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.”

Shoppers can also expect to find fewer sales and promotions this holiday season, with 22% 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%.

The executive survey was based on a sample of 51 retail senior-level business executives (C-suite, EVP/SVP, VP and director roles) from Wharton’s Baker Retailing Center boards and network and was fielded in October 2021.

 



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