In 2020, many Americans were unable to spend the holidays with their families due to the COVID-19 pandemic. This year, thanks to the availability of vaccines and the lift on travel bans, people are returning to their annual holiday traditions. Unfortunately, they’re likely to find the cost of celebrating has risen.
Thanksgiving is approaching and as families prepare for their festivities they will also have to prepare to expand their budgets, not just waistlines. The supply chain is still facing a tremendous bottleneck problem, which has led to a shortage of goods, causing companies to inflate prices in order to hit their bottom line.
As a result, people will see a rise in the cost for those Turkey Day favorites. And for those traveling, the prices for gas and airfare will be much higher.
Let’s take a look at how much the supply chain disruptions will have an impact on your holiday expenses.
The American Farm Bureau Federation released its annual report showing Americans should plan to pay 14% more this year for their Thanksgiving feast.
Turkey, the star of the meal, has seen the highest inflation. The average cost-per-pound for this holiday staple is up 24% from last year.
While you’re shopping for the ingredients for your famous pumpkin pie, you’ll notice a jump in price for nearly every item you add to your cart (pie crusts are up 20%!). From cranberry sauce to dinner rolls to potatoes, most Thanksgiving must-haves will ring up higher at checkout this year.
Climbing gas prices are causing holiday travelers to reevaluate their plans for the upcoming celebrations.
According to a recent survey by GasBuddy, it’s projected that the national average at the pump will be $3.35 by Thanksgiving day. That’s $1.24 higher than last year, and if oil prices keep increasing, that number could continue to rise. This is likely to deter drivers from making any lengthy trek, even for the mouth-watering smorgasbord of comfort foods.
Last year, travel quarantine mandates forced many flying for the holidays to keep their feet on the ground. This season, the restrictions have been lifted, but now soaring jet fuel prices are having a significant impact on airfare costs. Ticket prices are expected to jump 23% from 2020, and with increasing fuel prices, this cost could be even greater.
So don’t be surprised, or take it personally, if many of your out-of-town relatives RSVP “no” to Thanksgiving this year. Instead, think of all the money you’ll save on food!
This widespread spike in prices is a result of a domino effect in the supply chain, and it all begins with labor shortages.
Supply chain companies have experienced a massive surge in employee turnover during 2021. In efforts to retain incoming and existing workers, many organizations offered incentives such as increased wages and signing bonuses, without seeing much return on investment.
Fewer employees with a higher demand for product was the next tile in this chain reaction. More and more goods needed to be processed, but a reduced workforce couldn’t support this demand.
Ultimately, companies ended up spending more on retaining this smaller workforce without seeing an increase in productivity, forcing them to inflate prices to compensate.
Costs are predicted to continue to rise into 2022 unless the supply chain can find a solution to the labor crisis. To do this, companies will need to explore new ways to successfully retain their frontline workers.
WorkStep RETAIN is the leading workforce retention software solution that enables supply chain organizations to communicate with their frontline workforce and gather real-time anonymous feedback. Check-ins are sent at key milestones, providing workers an opportunity to share their experience with the company. Leaders immediately receive these insights allowing them to take immediate action.
Contact us today to learn how WorkStep RETAIN could significantly reduce employee turnover for your organization and boost your bottom line.