Finance Finance News ‘The Big Crunch of 2021’: Why shoppers everywhere face major delays

‘The Big Crunch of 2021’: Why shoppers everywhere face major delays

Australia's consumer watchdog says there's a grinch in the wings heading into Christmas. Photo: Getty
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Pick up a newspaper anywhere in the world this week and you’re guaranteed to find a headline warning about COVID supply chain chaos.

Consumers the world over are being told to do their Christmas shopping early to avoid missing out as businesses warn of major delays to delivery times.

Earlier this week, the Chinese government warned consumers to stock up on essentials due in part to COVID restrictions.

Last month, UK supermarkets resorted to filling empty shelves with cardboard cutouts of fruits and vegetables.

And in Southern California, where container ships arrive in the United States from China, mountains of goods are sitting undelivered at ports.

Bloomberg has dubbed the worldwide trend ‘The Big Crunch of 2021’.

And it all boils down to a massive change in spending patterns during lockdowns, as we stopped going to bars and restaurants and instead spent big on goods like furniture and electronics.

Further aggravating the crisis is a shortage of computer chips and timber, together with an unfolding energy crisis in Europe and Asia.

But local retailers such as Myer and Big W are reassuring shoppers that they are well stocked for the Christmas period.

‘Extremely congested’: ACCC Christmas warning

Australia’s consumer watchdog sounded the alarm locally on Thursday, warning shoppers to get in quick with their Christmas shopping as “extreme congestion” in global supply chains would delay the delivery of overseas goods.

The ACCC said freight costs had soared about 700 per cent over the past year but noted this could not guarantee the timely delivery of our Christmas presents.

“Pre-pandemic, the sector would have likely been able to manage such a surge in containerised demand,” ACCC chair Rod Sims said.

“But the simultaneous destabilisation of almost every part of the supply chain has left them without any spare capacity and struggling to cope.”

This is one of those global problems with local symptoms.

Australia Post has already been forced to temporarily suspend parcel deliveries in Victoria and New South Wales this year and is now preparing for a record Christmas.

Australia Post said last week that shoppers should post Christmas gifts by December 13 at the latest, or by December 20 for express post.

The national postie is investing millions of dollars to increase its delivery capacity by 30 per cent in time for December 25, but retailers are still warning shoppers to expect shortages and higher prices.

Retailers reassure shoppers

The ACCC said on Thursday that some big retailers are now so worried their cargo won’t arrive before Christmas that they’ve taken to buying shipping containers and chartering sea vessels.

“International shipping line movements normally run lean and just in time,” Mr Sims said on Thursday.

“But a surge in demand and COVID-19 outbreaks that have forced numerous port operations to temporarily shut down have caused congestion and delays with a cascading effect across the globe.”

Other retailers are playing down the problems.

Myer chief executive John King told investors on Thursday that the department store is “well stocked” heading into the Christmas period.

Woolworths chief executive Brad Banducci told reporters last month that the retailer’s department store brand Big W had also managed to stock up before the Christmas rush.

And Dan Murphy’s has reassured customers it won’t be affected by a booze shortage over the Christmas period.

But sky-high computer chip prices are already causing shortages of electronics for all retailers, sending prices much higher since COVID.

And items as far flung as bicycles are also experiencing shortages.

It all means that shopping early and being willing to settle for the second or third item on your wish list will be important.