9 October - 15 October
The Intriguing Reality of Inflated Halloween Candy Prices
Spotlight on the impact of inflation on candy prices and how this Halloween, treats will be all the more difficult to obtain.
Highlights on US companies finding suppliers and producers closer home to battle trade woes with China, retailers starting the holiday shopping spree in October itself, and more.
Trending discussion on the Global Supply Chain Pressure Index (GSCPI) reporting a level of 1.05 for September 2022, suggesting that things, at least in terms of supply chain disruption, have gotten better.
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Food shortages have been a hallmark of the pandemic that is still plaguing the US and parts of the globe. Various events like the Russia-Ukraine conflict, and global inflation, among others, have influenced supply chain disruptions. Even after things normalized, post vaccinations, easing pandemic woes, shortages of essential food items like butter, baby formula, and other daily necessities are still a concern. As we segue into the holiday season this Halloween, shoppers across the US might also face a dearth of those chocolate and candy bars thanks to inflation.
Higher prices are making it less likely for shoppers to splurge on candy. As with nearly every product this year, candy prices are being affected by inflation, the war in Ukraine, and supply chain issues. Back in August, Hershey said it wouldn’t be able to meet the demand for Halloween, but the company later reassured shoppers that there would be enough to meet the needs of all the neighborhood Minions and Mavericks.
According to PayPal data, the cost of Halloween candy is expected to increase by 34% compared to last year. The Bureau of Labor Statistics reported that candy prices rose 2% from July to August. Hershey hiked its prices by 14% in June, while Nestle increased its candy prices in the US by 9.8% in July. Mars Chocolate raised its candy prices the least, by 7%.
To deal with inflation and still keep up the supply of those beloved candy bars, unfortunately, while prices are growing, some items are getting smaller, a phenomenon sometimes referred to as “shrinkflation.” For example, Hershey reduced its 18-ounce packs of dark chocolate Kisses by almost 2 ounces while keeping the list price the same. Deals website TheKrazyCouponLady.com compared prices at Target, Walmart, CVS, and Walgreens, finding that Target and Walmart have the best prices per package on popular brands.
The Halloween season and possibly consecutive festivals will be affected by supply chain issues and global inflation. Typically, during inflation, demand for essential goods may stay steady, but for other commodities, demand is likely to go down. This is one of the main reasons why port congestion seems to have eased at various US ports. There might be fewer treats and more tricking this year on Halloween to make up for increased chocolate prices.
For manufacturers and retailers, as well as supply chain stakeholders, it remains to be seen what the holiday season will bring. But for households and families, dealing with inflation will probably translate into lower spending on consumer goods.
- Several years of supply-chain instability are pushing an increasing number of US retail companies to shift some production and supply from China to North America or Europe, despite 30% increased costs.
- Black October is here: Transport delays and labor shortages slow the supply chain as holiday shopping begins. Customers may have to pick up goods from physical stores instead of home deliveries.
- Various indexes indicate that the supply chains will return to normal in 2023, but experts like Jason Miller, an associate professor of logistics at Michigan State University, caution against getting overly confident based on how some supply-constraint barometers are designed.
- Jackson Dome, a source of CO2 in the US, has experienced some natural contamination. As a result, you may well see rising costs and beer scarcity in some brands.
- Rising expectations for the fast delivery of high-value products have fueled demand for near-airport warehouses and forced tenants to pay substantial rent premiums compared to other industrial spaces in large metropolitan areas, according to a new report from CBRE.
Port congestion, delayed schedules, and vehicles, as well as labor and equipment shortages, have been the norm since the pandemic hit. But things seem to be looking up finally. Port congestion across various US ports has eased, and different indices provide a positive outlook for 2023. Despite the Russia-Ukraine conflict, supply chain woes may go back to pre-pandemic levels.
The Global Supply Chain Pressure Index (GSCPI) reported a level of 1.05, for September 2022, which is a mere quarter of the peak reported in December 2021, suggesting that things, at least in terms of supply chain disruption, have gotten better. The level is akin to the one reported in Nov-Dec 2020. While select ports such as Houston have been seeing high levels of congestion (about five to six weeks) over the spurt in volumes, global port congestion seems to have eased, as against the peak of December 2021 to January 2022.
While the ‘Chinese Golden Week’ led to no upticks on the Shanghai and Chinese Container Freight Indices, the Freightos Baltic Index took a 9% hit, to end at US$3,699, almost on par with the Drewry’s World Container Index, dwindling to one-third of its peak level quote. FBX12 which reports quotes from North Europe to China/Asia reported a 22% dip to register its lowest quote ever on the index at US$375, while the China-US West Coast Rates (FBX01) are reportedly at US$2,435, even lower than those reported by Drewry’s.
The volume play in US ports also seems to indicate/reflect this, with the August volumes for New York, New Jersey, Los Angeles, and Long Beach being lesser than the equivalent volumes last year, which was around the time the indices peaked (September 2021). The dips have been anywhere from -0.5% to -16%. Global Schedule Reliability of 47% is near December 2020 levels, again something reflected in the Global Supply Chain pressures. And despite the overall negative picture, rates on US-Europe trade lanes are at record highs as reported earlier by Drewry’s.