What To Know About Supply Chain Shortages Ahead of Christmas

Wondering why there are supply chain shortages for so many essential products in 2021? Here’s what to know leading up to Christmas and the new year.

This story was updated on Dec. 9, 2021, at 2:11 p.m. ET.

Coping with the supply chain shortage, seen at grocery stores, car dealerships and more, has become a part of life in the pandemic. And even though we're approaching our third calendar year with COVID, the 2021 shortages are showing no signs of slowing down. In fact, this Christmas and holiday season is expected to be a challenging one, due to shortages coming down the pike.

Supply chain shortages also impacted Thanksgiving staples, such as turkeys and cranberry sauce, and are already affecting Christmas trees and gifts.

Recent polling from Morning Consult indicates that millennials and Generation Z are most likely to be impacted by product shortages. About 70% of millennials and Gen Z surveyed said an item that they wanted was out of stock in stores, compared to 36% for Gen X and baby boomers. When shopping online, 72% of young consumers encountered out-of-stocks, versus 40% of older adults. In addition, 65% of young people also said an item they already ordered was on back order or delayed, compared to 37% of older generations.

What is causing supply chain shortages?

Current shortages due to COVID in 2021 partly stem from consumers having extra cash because they're not yet comfortable spending it on experiences, so instead, they're purchasing goods, driving up supply chain demand.

"This sort of drag in recovery has a lot to do now with consumers just hesitant to resume normal life, very understandably because the pandemic is still very much with us," Claire Tassin, retail and e-commerce analyst at Morning Consult, told NBCLX. "We are seeing growth again in terms of people's willingness to dine out, travel, go to theater ... and things of that nature. It's just not where it was pre-pandemic, and it's probably not going to be there for a while longer."

Another factor is that the supply chain "wasn't in great shape" prior to COVID and "the pandemic effectively hit the entire supply chain at every angle, from manufacturing through logistics and consumer demand," she explained. "It was really kind of a perfect storm for this to happen."

The coronavirus pandemic caused people to buy more goods to replace services they weren't accessing (like buying workout equipment instead of going to the gym, or buying kitchen equipment instead of eating out). Now many products are out of stock, with shortages affecting millennials the most, according to a poll from the Morning Consult.

For example, the infrastructure that the supply chain relies on is antiquated, especially in ports, the trucking industry and warehouses, Professor Awi Federgruen at Columbia University told NBCLX Storyteller Clark Fouraker. Hiring more truck drivers and changing the ratio of what the U.S. manufactures domestically versus offshore could help, but it's "questionable whether enough could be done to make a big dent before the holiday season," Federgruen said.

Let's take a look at some of the trending supply chain shortages and why it feels like there are shortages of everything.

Christmas tree shortage

The Christmas three shortage 2021 is being caused by supply chain issues and climate change, CNBC reported, and it affects natural and artificial trees. There is a greater demand for Christmas trees this holiday season with people spending more money on home goods during the pandemic and having larger gatherings this winter because it feels safer to get together. Extreme weather due to climate change has also reduced the number of trees purveyors have been able to grow.

Turkey shortage

There were fewer turkeys available this year compared to previous Thanksgivings, according to the U.S. Department of Agriculture. As of August 2021, "inventories of frozen whole turkeys and turkey parts were 24% lower than 3-year average volumes," the agency reported. That's a problem because usually retailers try to build up their stock throughout the year to meet holiday demand. This year, turkey stock peaked and started to decline earlier.

Cranberry sauce shortage

Ocean Spray, a leading maker of cranberry products, was affected by supply chain shortages, which impacted the availability and cost of cranberry sauce for Thanksgiving 2021. In particular, the company cited issues with the supply of aluminum cans and transportation. Increased production costs have also had to be transferred to consumers, Ocean Spray CEO Tom Hayes said.

Chip shortage

The COVID-19 pandemic has led to a chip shortage, also know as a semiconductor shortage. Many everyday electronics require a semiconductor to function, but the car industry has felt the chip shortage quite acutely. When the pandemic struck, lockdowns shut down manufacturing facilities, limiting stock. Also, 60% of semiconductors are manufactured in Taiwan, so disruptions to global supply chain and U.S. tensions with China have exacerbated the problem. CNBC reported last month that the semiconductor chip shortage is expected to continue into 2022.

Food shortage

While the U.S. Department of Agriculture is currently reporting no nationwide shortages of food, consumers are still dealing with shortages and delays in grocery stores across the country, according to Professor Patrick Penfield at Syracuse University. A recent Costco sign went viral for apologizing for the chicken shortage, and chicken shortages have prompted KFC to stop advertising its chicken tenders on TV out of fear it wouldn't be able to meet surplus demand, NBC News reported.

The food shortage could affect other staples, especially during the holidays, such as evaporated milk, cooking oil, tofu, turkeys, bottled water, carbonated drinks, canned products, bread, liquor and toilet paper, according to Penfield, who added, "We continue to see supply chain disruptions throughout the food supply chain."

Cream cheese shortage

A cream cheese shortage is affecting New York City bagel shops specifically, the New York Times reported in early December. Why is there a cream cheese shortage? For the past several weeks, the manufacturers who provide dairy suppliers with the unprocessed, unwhipped product that bagel shops then turn into their own cream cheese have been experiencing shortages. The NYC cream cheese shortage is largely attributed to the supply chain issues plaguing many other industries.

Soda shortage

The average grocery store has 5 to 10% of its products out of stock right now, according to the Washington Post, but about 13% of beverages are out of stock, from water to beer to soda. A lack of bottles and cans is the main reason behind the soda shortage 2021. The CEO of Coca-Cola told customers in July to expect shortages in grocery stories through 2022.

Labor shortage

A record 4.3 million workers walked off the job in August, and there are some 10.4 million job openings in the U.S., NBC News reported last month. What's more, the rate of people quitting their jobs recently reached a record 2.9%.

"[Workers] have some ability to be a bit picky and find a job that works for them. We're certainly seeing [that] especially in the retail sector," Tassin said. "Many retailers are having to increase wages to make those jobs more attractive. There's also the issue of child care still being really challenging. So that's certainly inhibiting some people from getting back to the workforce."

The health care sector has lost more than half a million employees since the start of the pandemic, according to NBC News, with a nursing shortage leading the pack. The industry was aware of the nursing shortage prior to the pandemic because of factors like an aging population, a wave of baby boomer nurses retiring and fewer nurses wanting to work with patients directly. But COVID-19 has increased burnout among health care workers and worsened some of these conditions, according to the American Association of Medical Colleges.

Car shortage

Car dealerships across the country are struggling to meet demand due to the semiconductor chip shortage. In September 2019, 3.5 million new vehicles were for sale compared to less than a million in September 2021. The chip shortage is impacting cars partly because there just aren't enough chips, but also because at the beginning of the pandemic, the chips that were manufactured were directed toward the electronics people relied on when staying at home.

The chip shortage has led the vast majority of carmakers to reduce shifts or shut down assembly lines temporarily, The New York Times recently reported. Per CNBC, the chip shortage is expected to continue into 2022, which will also impact the car shortage. Car prices aren't expected to return to normal until 2023, according to CBS News.