Capital Region businesses warn of supply chain issues heading into the holiday season
Businesses across the country are facing supply chain problems as the shopping season ramps up. Small businesses in the Capital Region are preparing for a different kind of holiday season this year.
At a recent visit to a grocery store just before the Thanksgiving holiday, business was brisk at a time when consumers are reporting some empty shelves.
Problems with supply chains have products headed to the United States sitting overseas, and the costs to ship containers has also increased due to demand. All of that has customers worrying about whether they’ll be able to buy the gifts they want for the holidays.
Anthony Capece J.r is executive director of the Central District Management Association in Albany. He says a big challenge businesses face right now is finding consistent and quality inventory for everything from store products to paper bags and receipt slips.
"Bigger companies know where the shortfalls might be and they have the capacity to buy rail cars worth of things. Where a small business is going to have to get what they can get and pivot. And of course, the downside of all that is the customers may not understand that a small business’s buying power is significantly challenged. If they try to buy two cases of something that might be more than their budget can handle. But, if they don't buy the two cases of it, they won't have it," Capece said.
Exacerbating the problem is the labor shortage. Businesses are having trouble filling open positions while people are quitting and retiring at a higher rate than normal. The November jobs report from the U.S. Department of Labor found Americans quit their jobs at a record pace for the second straight month in September, in many cases for more money elsewhere as companies bump up pay to fill job openings that are close to an all-time high. The Labor Department says 4.4 million people quit their jobs in September, about 3% of the nation's workforce.
Capece says he’s also heard from businesses seeing an increase in consumer spending at the same time.
"I think, genuinely, people are out spending money and that may also be contributing to the supply chain issue. We've heard rumors that people are buying more. So, that's kind of a weird anomaly that people (want) to buy more, but the supply isn't there to provide it," he said.
Judy Alsescio owns The Silver Shop in downtown Schenectady. She says while many of the items in her store are handmade, the supply chain issues are impacting her vendors.
"So, I have one supplier in Massachusetts, that handmakes everything, but certain metals or supplies that she needs to create the jewelry, she's not able to get. So, I've had to be super prepared and order early, so it can be made - becasue it's made to order - then have it in the store in time for the holidays." she said.
Given the bad business news, she’s seen a change in customer behavior.
"People are starting their shopping early. I've heard many times customers come in saying they're hearing on TV (that) you need to get your shopping done sooner rather than later and people are starting to do that, for sure. I've heard that so many times. So, that's the impact other than the supply chain. It's not such a bad thing people are definitely aware and they're making adjustments to their schedule. So, hopefully, hopefully, it'll be a successful holiday season," Alescio said.
The food industry is also facing a shortage of goods. Maria Perreca Papa is co-owner of Perreca's Bakery and owner of More Perreca's Italian Kitchen in Schenectady. Her family has owned and operated the bakery since 1913. Papa says the family business has never experienced a supply shortage quite like this:
“Flour is a commodity, so it goes up and down in price all of the time and we're used to that. But, having it be scarce and actually having the challenge of finding it and going from vendor to vendor - we have not experienced that in our century of business,” Papa said.
Papa says finding takeout and disposable containers is nearly impossible, and the cost has increased dramatically. But she thinks it will only take time for these issues to correct themselves. For example, she says at the start of the COVID-19 pandemic, chicken was scarce and cost nearly 300 percent more than it usually did, but that issue has corrected itself.
“We've always seen flour fluctuate, chickens fluctuate, beef fluctuates, but we've never seen scarcities and I think as a whole, our culture - at least in our lifetime, maybe since the Great Depression - has not experienced scarcities. Quite honestly, I'm not certain if the average consumer realizes the challenges that merchants are experiencing getting these staples," she said.
The business owners who spoke to WAMC News all have similar advice for holiday shoppers this year: shop early and have patience for businesses struggling to keep up with demand.