The Briefing

Will Santa arrive on time?

Supply bottlenecks are bringing the globalized world to a standstill.

October 28, 2021
Reading time 2 min.

🌈 A quick taster for you:  

  • Start thinking now about what christmas presents to buy.
  • Compare prices in store and online.
  • Consider making homemade presents!

🧐 Why do I care?

It feels like Christmas starts earlier each year, doesn't it? The speculoos are already in the supermarkets, and the first Christmas tunes on Spotify. And although the business of Christmas probably does begin at the same time each year, this year it might be wise to start thinking about it a little earlier. In previous years, people who bought their Christmas presents in October might have been regarded as a little strange... but this year you might want to join them! That’s because there are global supply shortages, and almost all industries will be affected — from consumer electronics to wood processing — so it’s going to affect us all.

🔍 What exactly is happening here?

  • A raw materials crisis
    There’s a worldwide shortage of the materials that we use in everyday life, such as computer chips, copper and gas. Basically, sitting in a warm living room with the new PS5 at Christmas time is becoming not only more expensive, but also less likely — well, at least as far as the Playstation is concerned! That’s because the current supply bottlenecks will lead to an increase in the price, simply because when something is no longer available in abundance then the market ensures (supply/demand) that prices rise.
  • Boats, boats, boats
    European ports are overloaded and can’t cope with the number of container ships. Due to the Corona crisis, production levels in many countries fell, which led to many shipping companies reducing their number of ships. But now that the economy is slowly regaining momentum, the shipping companies can no longer keep up. There’s also a shortage of lorry drivers — so if you happen to have a lorry driver's license then you won't find a better-paid part-time job at the moment!
  • An example: the bicycle
    The bicycle you buy in your local bike store, or online, is usually assembled in Germany — but its individual parts come from all over the world. Because of faltering supply chains, 100% of bicycle retailers say they currently don’t have enough supplies. Therefore many bikes, especially those in the low-priced and mid-range segment, are becoming either more expensive or simply not available. However, the bicycle market is only one example — the entire German economy is affected, including electronics, furniture retailers, and DIY stores.

🤓 What does this mean for me?

It’s a good idea to start thinking now about what you want to give your loved ones for Christmas! It’s not looking likely that supply chains will function smoothly again in the near future, and so the already busy Christmas business is going to reach its limits. 

But don't panic. Retailers have often calculated their prices far in advance, so you don't have to expect big price increases — but compare prices carefully, and don't leave all your Christmas shopping to the last minute. Giving books might be a good choice because their prices are secured and, according to the German Publishers and Booksellers Association, there won’t be any supply bottlenecks. 

Last but not least: homemade gifts are often the most beautiful because they’re unique, personal, and also more sustainable. So give it a go — you’ll find easy-to-follow instructions online about how to make your own soap, candles, caramels and jams!

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