Expect toy shortages and higher prices this Christmas, experts warn

It isn't even Halloween yet, and already experts are warning that Santa's bag could be pretty empty this Christmas, if Santa's helpers wait too long to buy gifts.

The global pandemic, which has led to shortages of car parts and toilet paper, might lead to a toy shortage.

"Retailers and manufacturers may only get one full import of their supplies," said Dr. Sean Coary, assistant professor of marketing at Loyola University of Chicago Quinlan School of Business. "Trying to reorder and get another supply from overseas may just be logistically impossible."

While many toys are relatively inexpensive to produce, they are often shipped long distances – sometimes halfway around the world. That means shipping can be 30 to 40 percent of the total cost of a toy. And shipping prices have skyrocketed. Coary said that last year, it cost about $3,000 to ship a 40 foot container. Now that same container might cost $18,000 to $20,000 to ship. Those prices will be passed along to consumers.


Hasbro and Mattel are both anticipating supply chain problems, and Hasbro noted in its latest earnings report that "we are implementing price increases during the third quarter, that should be fully realized by the fourth quarter.  We expect this to offset the rising costs in freight and commodities we continue to see across the business."

Shipping is not the only issue. Hurricane Ida might also lead to higher plastic prices, since plastic is made from crude oil.

"Iif those supplies get disrupted, the price of plastics go up," said Phil Flynn, Senior Market Analyst at Price Futures Group . 

For parents like Annette Cristerna, who has to shop for her three kids plus a bunch of nieces and nephews, it means she better start soon.

 "We want to have the kids have a great Christmas, especially with last year," Cristerna said.

Coary agrees that shopping now is the best plan. Toy stores and warehouses usually have shelves stocked for the holidays by mid-October.

"If you start your shopping after Thanksgiving and you wait until Black Friday, you’re basically admitting and just accepting that you’re gonna be paying higher prices for the toy categories," Coary said.