(Trends Wide) — It’s good that consumers want to spend for the holidays. However, they may have to pay more for a new artificial Christmas tree this year, depending on where they buy it.
Some big sellers of artificial trees in the United States say they are increasing their prices by double-digit percentages and blame excessively high shipping costs related to the current global supply chain disaster.
“We will have to raise prices. In the case of trees, the average will be 20% more,” said Mac Harman, CEO of Balsam Hill. The Redwood City, California-based company records more than $ 200 million in annual direct-to-consumer sales of artificial Christmas trees and other decorations in the United States.
“Even then our costs will not be covered, because this year we are paying up to 300% more per shipping container,” said Harmon.
Months and months of shipping disruptions, due in part to overseas factory closures triggered by the pandemic, port congestion, and container and labor shortages, have led to delays in products ranging from laptops to sofas.
Now, when the holiday season for the end of the year is just around the corner, decoration providers are also concerned about having enough products to meet demand.
National Tree Company in Cranford, NJ, is a large wholesaler of artificial trees and other Christmas decorations such as inflatable ornaments, wreaths, and Santa Claus for retailers such as Walmart, Target, and Amazon.
Chris Butler, CEO of the company, hopes that shoppers will be willing to indulge in decorations to celebrate, especially after another difficult year in a pandemic.
“From a macro perspective, we expect demand for our products to increase 25% over last year,” Butler said. “We expect to sell between 1.5 and 2 million artificial trees this year.”
But you are concerned that if demand is very strong, you may not have enough products in stock to meet it due to delays in shipments. The vast majority of the company’s products are made in China.
“We think we are 10% below what we usually are each year with our inventory of trees, wreaths and garlands,” he said. Butler said the National Tree Company is raising prices for its wholesale trees by 20-25% due to exorbitant transportation costs. Retailers, in turn, could pass some of this price increase on to consumers, he added.
“We didn’t have any products to sell”
The American Christmas Tree Association industry group estimates the global size of the US artificial Christmas tree market to be between $ 1 billion and $ 2 billion annually.
At Balsam Hill, delays in receiving inventory have already created unprecedented setbacks.
In mid-August, the company shipped its fall product catalog. In addition to Christmas products, the company also sells fall décor items, such as front door or porch wreaths, which it imports from China along with most of its other fall products and Christmas trees.
“For the first time for us, the catalog was out of stock and we had no products to sell,” says Harman. “Our shipments did not arrive on time. We are still trying to figure out where exactly the products are. Are they still in the water or are they stuck in ports? If this keeps happening, we could go out of business.”
Some products have arrived. “They are about 12 of the 50 products that appear in the catalog,” he said. “Our overall daily sales are down considerably because we have no items to sell.”
Harman hopes to be in a better position with Christmas trees “because we bring them in year-round,” he said. But even so, Harman said that Balsam Hill’s tree inventory is 22% below last year’s level and that the overall inventory of Christmas decorations is down 42% from the previous year.
“We are most concerned about decorations like tree ornaments, tree skirts and wreaths,” he said. “We source these products all over the world. Even if one or two containers of those items are late, we may not have a whole category of items.”
Harmon said supplies of Christmas decorations are 50% below last year’s levels.
Treetime, a direct-to-consumer artificial Christmas tree and ornaments company based in Lake Barrington, Illinois, said it has seen more than a 500% increase in shipping costs this year.
The company designs and manufactures its own brand of pre-lit and unlit trees that cost between $ 100 and more than $ 1,000, depending on height and design. Its trees are also made in China.
“We are trying to absorb some of the shocking increases in transportation costs ourselves,” said Laurie Kane, co-owner of Treetime. Part of it, he said, will affect consumers’ pockets.
“We increased our prices, but we tried to keep them below 20%,” he said.
Kane keeps a close eye on the Christmas shipments, which should have arrived by now but haven’t.
For Kane, it’s critical that inventory arrives before Thanksgiving.
“The misconception is that people start decorating in December, but it’s actually late November,” he said. “December is when gifts are bought. Will anyone want our products if they arrive later? That is the biggest challenge for us.”