Holiday Supply Chains: What to Watch Out for This Season
While the supply chain is markedly more stable than in recent COVID-impacted years, the lingering effects – along with new hazards brought by national and global events – still make for a challenging end to 2023.
In “Economics of Holiday Sales,” a survey of retailers and brands, 88% of respondents expect holiday sales to drive up to 40% of their annual sales. But 78% also said they still have half of their stock left over from last year. Additionally, 83% said they’ve had to diversify their supply chains in the past year because their suppliers had financial issues or went bankrupt.
Meanwhile, an annual study from Coupa Software shows 83% of US and UK supply chain professionals expect supply chain disruptions will negatively impact holiday revenues, up from 70% in 2022. Staffing shortages are also an area of concern: 61% expect to experience increased wait times, while 54% expect increased shipping times as a result.
Larger global impacts can’t be ignored, either. Climate change created a drought that resulted in historically low water levels in the Panama Canal, increasing shipping wait times by more than 40% in August. And the ongoing Russia-Ukraine conflict is impacting the price and availability of food staples like corn and wheat.
Even Christmas tree availability may be affected. During the 2008 financial crisis, not enough trees were planted. Now the supply is smaller, and the CEO of the National Tree Company, a top importer and wholesaler of trees, has urged consumers to purchase a tree pre-Thanksgiving before they’re tough to come by.
All told, the past few holiday seasons have been an annual reminder for all organizations to keep a close watch on their supply chains and have plenty of backup plans in place to avoid those holiday blues.