Heads up if your kids need new sneakers or backpacks: There will probably be a shortage of back-to-school supplies
Back-to-school shopping is always a nightmare. This year, expect it to be even worse.Posted — Updated
While parents may be used to encountering shortages of items like sneakers, backpacks and gadgets later in the season -— which typically lasts from mid-July through the end of August — products are expected to be in tight supply even earlier. That means shoppers could find themselves picking over the handful of ugly backpacks and bent lunch boxes with missing pieces left at the store as early as this month.
With more classrooms fully reopening in the fall, industry experts expect demand on school merchandise to be robust with shoppers spending an average of $850 per family, according to the National Retail Federation, the retail industry's largest trade group.
But that demand is also coming face-to-face with tight inventory levels and delayed shipments which will impact retailers' ability to replenish products on shelves later in the season.
"What we will likely see is more limited choice and lower stock levels towards the end of the back to school period," said Neil Saunders, retail analyst and managing director at GlobalRetail Data. "Some consumers will inevitably miss out on the things they want to purchase."
He said categories in most danger of shortages include backpacks, stationery, sports equipment, laptops and tablets.
With supply being tight, consumers shouldn't hold out for deeper bargains either. "Discounts will be far less generous both because of less stock and cost inflation," said Saunders. "Consumers have to be savvy in some areas and buy products quickly."
Where are my Nikes?
The overhang of the pandemic is also adding to the problem, according to a new report on Monday.
If you're hoping to scoop up a fresh pair or two of Nike sneakers, you might have to move fast.
The report released this week from Panjiva, the supply chain research unit of S&P Global Market Intelligence, said Nike might run out of its sneakers it sources from Vietnam as the spread of Covid-19 accelerates in the region. The Panjiva report noted that two of Nike's suppliers in Vietnam have already halted production.
"In footwear, sneakers are by far the biggest back-to-school category for kids," said Beth Goldstein, retail analyst with market research firm NPD Group
Nike said in an email to CNN Business that it is "confident in [its] ability to navigate these near-term dynamics and we remain prudent in our planning." The company said it is prioritizing the health and safety of its employees and suppliers and it expects its suppliers to "prioritize the health and livelihoods of their employees."
Panjiva's data indicates that clothing, kids shoes and backpacks remain in tight supply with imports of those products in the second quarter up from last year but still below 2019 pre-pandemic levels even as consumer spending has revved up, boosted by government stimulus and pent-up demand.
Shoppers appear to have gotten the news about impending shortages, and they're hitting stores earlier than usual, said Rod Sides, vice chairman and US retail lead with Deloitte.
"Fifty-nine percent of them have said they would have their school shopping done by the end of July, up from 45% last year," said Sides, citing results from Deloitte's 2021 back-to-school survey that polled 1,200 parents from May 27 to June 5 who have at least one child attending school in grades K-12 this fall.
He expects spending on devices will be a big driver of those purchases. It's the category consumers are most worried about in terms of shortages. "Fifty percent of shoppers are concerned about stockouts, especially for tech items," he said.
Goldstein said many retailers and brands are trying a variety of ways to mitigate the shortages, including trying to bring in inventory on airplanes instead of by ship.
Levi Srauss is doing just that. CEO Chip Bergh told analyst earlier this month during an earnings call that as the company expects supply chain challenges to continue into the second half of the year, "we're going to be airfreighting more."
Walmart, a top destination for school shopping, said while inventories of most of its basic supplies are on track, some other categories are experiencing shortages but didn't provide further details.
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