Sorry, Shoppers: Holiday Toys Will Probably Be Harder to Find and More Expensive This Year
- Can't Make the Tax Deadline? Here's How to File for an Extension or Set up a Payment Plan With the IRS
- Do I Need a VPN?
- How to Choose a Financial Advisor in 2023
- What the Fed’s Pause on Interest Rate Hikes Means for Your Money
- What the Silicon Valley Bank Collapse Means for You (Even if You Don't Have Money There)
Will Bratz dolls, Tonka trucks, LOL Surprise! or other popular toys be on your holiday shopping list this year? If yes, you may be in for an unpleasant, pricey surprise.
Toys will likely be harder to get your hands on and more expensive this holiday season, thanks to a combination of shipping challenges and high demand.
"There is going to be a major shortage of toy products this year," Isaac Larian, CEO of toy company MGA Entertainment, recently told CNN Business. "The demand is going to be there. What is not going to be there is the product to fill the demand."
The country's supply chain — essentially, everything that goes into getting a product made, stored, shipped and to customers — is completely overwhelmed right now. Transporting goods from across the world, including from Asian countries that make many products that wind up in the U.S., has gotten much more expensive as retail companies scramble for space on shipping containers and deal with a scarcity of workers. Add shortages, including a global chip shortage that is impacting production on everything from cars to laptops, and you can see why shopping has gotten more difficult. And it will be even tougher as everyone heads to the stores to buy holiday gifts in the coming months.
Larian shared his frustrations about higher prices for shipping containers and a trucker shortage preventing his company from getting toys onto store shelves. Jay Foreman, CEO of Basic Fun, which owns and distributes Fisher Price toys among others, told CNN Business that some of his company's products were "stacking up" in Chinese factories while others were stuck on shipping containers.
Salesforce predicts U.S. retailers will face an extra $223 billion in costs of goods sold this holiday season, including jumps in the costs of freight, manufacturing and labor. Katherine Cullen, senior director of Industry and Consumer Insights at the National Retail Federation, recently told Money that the NRF has heard retailers are planning to fly products in instead of shipping them, which is more expensive. Companies may have no choice but to pass the cost on to consumers.
So even if you can get your hands on the toys you want, they may be pricier than expected. This could be the case especially as third-party sellers are prone to ratcheting up prices on popular toys (last year, ABC's KGO-TV found that a Baby Yoda toy that normally cost $59.99 was selling for $119 via third-party sellers on Walmart.com.)
Last year, economic challenges caused by the pandemic — including millions of workers losing their jobs — didn't slow holiday shopping. Retail sales during 2020's holiday season grew 8.3% compared to the same period in 2019, according to the NRF. This year, as the economy continues to open and add more jobs, people appear to be quickly spending more money ($765 more per month this summer than last summer, according to a new survey conducted for MassMutual).
So if your children are expecting toys during the holidays, remember that you are likely in competition with tons of other buyers. Better start shopping now.
More from Money:
Why You Should Start Your 2021 Holiday Shopping Now (No, We're Not Kidding)
Americans Say They're Spending an Extra $700 a Month This Summer
Tennis Balls, Pickles and 5 Other Surprising Shortages Right Now