No Turkeys, No Toys, No Problem

Black Friday has always followed Thanksgiving and this year they may have something else in common. Both days will be significantly altered by supply chain and labor shortages. Big box retailers who typically have aisles of cranberry sauce and freezers packed with frozen turkeys could see them vanish long before the holiday arrives. Similarly, popular Black Friday door busters like TVs and video games will be scarce. Thanksgiving tables could be filled with unusual items while Black Friday stretches out over multiple weeks. Consumers have funds burning holes in their pockets, while suppliers and manufactures are able to keep up. It will be a wild November.

Traditional Thanksgiving feasts feature families gathered around items like turkey, stuffing, sides, and some type of pie. While the family reunions this year might bring up fond memories, the food may not. Due to widespread shortages of basic goods the dinner table will have some unfamiliar treats. Alternative Thanksgiving meals like chicken, pizza, or smoked trout could become more popular as other items fly off of the shelves. There will still be high demand for traditional items; however, consumers are unlikely to forgo their feasts simply because a turkey or ham is unavailable. It will be a good opportunity for other manufacturers and suppliers to fill a void in the market. Manufacturers and suppliers will have a harder time filling orders for major chains and warehouse style retailers like Costco and Walmart. These orders are typically large and during the current shortage they can be difficult to fulfill. This is boon for smaller chains looking to fill lighter orders and take advantage of pent-up demand. These Mom and Pop shops could draw in new customers that are looking for unique items if the standard fare is not available in larger stores.

Black Friday will also be significantly altered this year with many stores already offering early deals. We have seen Black Friday get stretched out over multiple days in the past; however, this year we are likely to see the pinnacle of that evolution with sales possibly lasting the entire month. This is due to multiple factors including the ongoing pandemic, labor shortages, and supply chain disruptions. We saw some stores extend sales last year in order to prevent large crowds and that is likely to happen again. Many companies are lacking employees which will make extended store hours and big door buster events more difficult to accomplish. The issues in the supply chain will also give stores cause to spread out the demand over multiple days.

The demand for food and presents for this holiday season may be the highest we have ever seen. The pandemic has directly contributed to this pent-up demand; however, it has also choked the supply chain and ensured that the demand will not be fully met. Even with capped revenue due to supply, we could still see some record gains this holiday season. A major downside to this is some of those gains will be the result of higher prices of goods like food and electronics that will be in short supply. The hope is that this inflation is temporary and will dissipate once supply lines are back in working order. People are concerned about the economy and it could cause shoppers to be a little tepid this holiday season when we factor in the supply shortage.

Since the beginning of the pandemic the unusual has become usual and this holiday season looks to be no different in that regard. Turkeys will run in short supply and Christmas presents will too. Prices will be higher and deals will stretch for weeks in an attempt to give the supply enough time to catch up with the demand. Last minute shoppers will be left out in the cold and suppliers will have to pick and choose which orders to fill. This year could feature a highly lucrative Black Friday or we could all end up searching for a Turbo Man like Arnold Schwarzenegger and Sinbad in Jingle All the Way.