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If you are amongst those who have been waiting months for an order to come in, you should get prepared for even longer waiting periods, skyrocketing prices, widespread shortages, and less variety of an increasing range of products as strains in the US supply chain are compromising manufacturers’ and retailers’ ability to keep up with the exploding demand. And if you’re thinking about buying a new car, smartphone, or any domestic appliance, you might face the longest waiting line and the highest price surges in the market as a global chip shortage continues to delay the production and delivery of several goods.
The semiconductor shortage was initially concentrated in the auto industry. Last year, after the sanitary outbreak burst in America and triggered the worst economic recession since the Great Depression of the 1930s, global supply chains faced a major breakdown and carmakers decided to reduce orders for chips anticipating a decline in demand, while tech companies – seeing their sales jump amid lockdown mandates – ran to ensure as many chips as they could. However, the health crisis and government stimulus have changed consumer shopping patterns, and demand for cars never ceased to grow.
Right now, as the shortage is going from bad to worse, it has spread from cars to consumer electronics. According to Goldman Sachs, 169 US industries embed semiconductors in their products. And considering the largest part of chip production remains concentrated in a handful of suppliers, supply chain experts have been warning that the crunch is likely to last until 2022. The constraints are already driving up the price of vehicles across the country particularly because car dealers are seeing stock levels sharply drop. In March, the average price for a new car has jumped to $37,200, marking an 8.4% increase from the same period a year ago.
Plastics and resins and a series of other raw materials, including steel and aluminum, are also facing major shortages and consumers are already trying to judge how rising prices and material shortages are likely to play out during the second half of the year. But it’s not just chips and raw materials. A lot of things consumers buy on a regular basis are disappearing from grocery shelves while others are registering price hikes while inflation subtly eats away at our wallets. Even though raw materials have seen the biggest price increases, the cost of many household goods has started to creep up as well, as the supply chain crisis is also impacting what’s available at grocery stores.
At this point, you probably have noticed that the variety on grocery shelves has been dwindling. Companies are strategizing and prioritizing some products to optimize production. The new consumer patterns have pushed brands like Coca-Cola to discontinue products much faster than they normally would. And experts warn food and beverage companies will keep shrinking their portfolios this year, meaning that your favorite cookie, soup, or soda flavor may soon disappear from the stores.
Walmart, for instance, dramatically diminished their offering to unburden their supply chain during the health crisis. The retailer reduced most product categories, just maintaining two options in each – their own in-house brand and the best seller category brand, and this trend will certainly persist throughout this year. Shortages of canned goods are expected to include a wide range of staples, varying from canned vegetables to soft drinks, and craft beer. Most vegetables are grown seasonally and harvested once a year, and after supplies are gone, “you can’t simply produce more of it,” explained Gus Lebiak, president and COO of Krasdale Foods, a grocery wholesaler in New York City.
Business Insider reported that bacon and hot dogs and several pork products might become scarce in the summer. “Bargains on meat might be tough for consumers to find this summer,” said the analyst. “So my advice to consumers would be to stock up when you find a good deal.”
If you haven’t started prepping just yet, you should take the chance to stock up on your favorite staples before stores completely ran out of supply. Given that the supply chain crisis is getting worse by the day, there’s no end in sight for the ongoing product shortages. And the longer you wait, the highest will be the risk to find inflated prices and a very limited variety of flavors and brands. The time has come for Americans to confront the effects caused by the trillions of printed money that are flooding the system. Heated demand and supply shortages will undoubtedly reflect the rapid decline of our purchasing power, so get ready because the next stage of the US economic collapse will bring about challenges you might have never imagined.”