The U.S. economy is 20 months removed from one of the most bizarre events in modern times. For about two weeks, consumers flooded every gas station, residence, warehouse, farmhouse, henhouse, outhouse, and doghouse in a hunt for toilet paper, grabbing any last sheet of Cottonelle and – God forbid! – one-ply generic brand they could locate. Now, the U.S. marketplace could endure another chaotic scene of shoppers on the prowl as reports warn that the country might be on the brink of another toilet paper shortage. So, is it time to install a bidet in your bathroom?
Toilet Paper Shortage: Round Two
The international marketplace is experiencing a unique time: Everyone is demanding everything simultaneously, from coffee to copper to Charmin. This has resulted in sky-high prices for many popular goods at the neighborhood grocery store. But Costco may be sending signals to Americans that toilet paper could, once again, turn into a scarce product and become as valuable as gold.
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During its fourth-quarter earnings call, the retail juggernaut revealed that it would be “putting some limitations on key items” in anticipation of increasing coronavirus infections, which could result in another round of panic buying. This means shoppers will be competing for toilet paper, cleaning products, and Kirkland-brand water.
Richard A. Galanti, Costco’s executive vice president and chief financial officer, explained that supply chains had been severely impacted by multiple factors: container shortages, port congestion, upward labor cost pressures, and a lack of drivers and truckers. “A year ago, there was a shortage of merchandise. Now they’ve got plenty of merchandise, but there’s two- or three-week delays on getting it delivered,” said Galanti during the earnings call, adding that Costco is “ordering as much as we can and getting it in earlier.”
Brace Yourselves, Winter Is Coming
The next several months may test the patience of consumers and the resilience of retailers. Indeed, it is stressful for the business community as industry experts believe there will not be any respite in this global calamity for another 18 months. However, time is of the essence as Old Man Winter is about to move himself in, an uninvited and unwelcome house guest. But market analysts are also concerned about the resurgence in COVID-19 cases that could derail the recovery.
Over the next few months, more shoppers might find this sign on doors and websites: “Due to nationwide supply chain issues, some of your favorite items may be temporarily unavailable.” From Christmas trees to Lunchables to some KFC chicken products, many consumer goods might not be found on store shelves over the coming months. And this could weigh on the holiday season, prompting merchants to push shoppers to pay a visit to Santa’s workshop earlier than usual. A recent KPMG poll found that 80% of U.S. executives are either “somewhat concerned” or “very concerned” about supply shortages during this year’s season to be jolly.
So, will it be a frenzy again akin to March 2020? As it was first uttered in 776 B.C. in Athens, Greece, “Let the games begin!” Every day could be a scene out of Caracas.
Here Comes the Bad News
Shortages of Nike apparel and paper towels may not be the most calamitous news in all of this. The worst development is the price inflation, driven by the global financial crisis and the central banks’ currency dilution. In other words, shoppers will not only endure diminished purchasing power but also contend with sticker shock at the supermarket, clothing outlet, and restaurant. Many companies are passing the buck to the consumers, bringing a vast number of U.S. households into a terrible predicament as they fend off the domino effect that has unfolded in the post-pandemic era.
~ Read more from Andrew Moran.
