The American Christmas Tree Association cites higher prices for lumber, trucking and fuel amid the ongoing global supply chain issues.
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Even artificial trees are feeling the pinch, and some large sellers say they are increasing their prices by double-digit percentages.
"We'll have to raise prices," Balsam Hill CEO Mac Harman said. "For trees, it'll be on average about 20% higher."
The company does more than $200 million in direct-to-consumer annual sales of artificial Christmas trees and other decorations in the United States.
"Even then. it won't cover our own costs," Harman said. "We're paying as much as 300% more per shipping container this year."
Months and months of shipping disruptions resulting in part from pandemic-triggered overseas factory shutdowns, port congestion and shipping container and labor shortages have caused delays for products ranging from laptops to sofa sets.
Now, with the year-end festive season around the corner, suppliers of seasonal decor are also anxious about having enough products on hand to meet demand.
National Tree Company in Cranford, New Jersey, is a large wholesaler of artificial trees and other holiday decor such as ornaments, wreaths and inflatables Santas to retailers like Walmart, Target and Amazon.
Chris Butler, the company's CEO, expects shoppers will be keen to indulge in decorations to celebrate, especially after another challenging year in a pandemic.
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"From a macro perspective, we expect demand for our products will be up 25% over last year," Butler said. "We expect to sell roughly 1.5 million to 2 million artificial trees this year."
But he worries that if demand is too robust, he might not be adequately stocked to meet it because of shipping delays. The bulk of the company's products are made in China.
"We think we are 10% below where we typically are every year with our inventory of trees, wreaths and garlands," he said.
Butler said National Tree Company is raising its wholesale tree prices by 20% to 25% because of exorbitant freight costs.
Retailers, in turn, might pass along some of this price increase to consumers.
A lack of inventory is also an issue, according to Harman.
"For the first time ever for us, the catalog was out, and we didn't have any products to sell," he said. "Our shipments didn't arrive on time. We're still trying to figure out exactly where the products are. Are they still on the water or stuck in ports? If this keeps happening, we could go out of business."
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Some inventory has arrived.
"It's about 12 out of 50 products listed in the catalog," he said. "Our overall daily sales are significantly down because we don't have items to sell."
He hopes to be in a better position with Christmas trees "because we do bring them in throughout the year," he said.
Even so, Harman said Balsam Hill's tree inventory is running about 22% below last year's level and overall inventory of holiday seasonal decor is down 42% year over year.
"What we're most concerned about are decorations like ornaments, tree skirts and wreaths," he said. "We source these products worldwide. Even if one or two containers with those items get delayed, we may not have a whole category of items."
Harman said holiday ornament supplies are 50% below last year's levels.
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