John Lewis promises to 'save' Christmas
Leading up to the Christmas period, our Packaging Evolution Champion Kevin McAulay examines supply chain resilience and looks at which brands and retailers are set to ‘make or break’ during this critical trading period.
What are toy retailers having to do to get goods on shelves this Christmas?
The Christmas holiday period accounts for a large chunk of toy company sales and leading toy companies are desperate to see supply, staff and skills shortages addressed in the run-up to Christmas. A worldwide shortage of materials, factory downtime, a huge rise in the cost of shipping, cargo backlogs, a shortage of HGV drivers, energy price hikes and local staffing problems are causing huge disruption to supply chains.
There are huge back logs at Chinese ports and even those lucky enough to get space on a container ship are paying more than $20,000 per shipping container to import toys and then often encountering further problems on reaching domestic ports. MGA Entertainment one of the world’s largest toymakers recently had more than 600 containers, filled with toys like its top-selling L.O.L. Surprise dolls, waiting at Los Angeles docks to be unloaded for more than six weeks.1 In an attempt to try and avoid this volatility and meet demand for toys, which has sky rocketed across Europe and USA, retailers like John Lewis, Walmart and Target have decided to charter their own ships.
Such disruption is difficult to plan for and deal with in the run up to the busiest trading period and for retailers like John Lewis which always makes a huge noise around Christmas, empty shelves and out-of-stocks are simply incompatible with their consumers’ expectations.
We are acting at every part of the supply chain to ensure Christmas is saved this year.
Sharon White, Chair, John Lewis
As well as chartering ships, John Lewis has taken on 7,000 seasonal staff and has raised wages for HGV drivers. The shortage of HGV drivers is fast becoming a primary pinch point in the movement of goods from ports into distribution warehouses and stores and many retailers are concerned this could affect the availability of goods in the UK this Christmas. It’s of such strategic concern to retailers that many are offering bonuses to try attract and retain HGV drivers. In October, Tesco announced they still had a shortfall of 800 HGV drivers even after offering a £1,000 bonus. To address this shortage with minimal disruption, Tesco is now transporting more goods by rail.2
In some cases, retailers have had to concentrate on goods that can be easily transported – those that can be air freighted, or max out a container. Large-scale operators have also been stockpiling and will look to local storage solutions to fulfil orders quickly.
Large firms with the financial wherewithal have been storing goods in their own warehouses or renting space to make sure they can start filling shelves over the next few weeks. It’s another example of how “scale will be the pivotal differentiator” this holiday season.
Jennifer Bartashus, Analyst, Bloomberg Intelligence
Most retailers in the UK remain confident that Christmas won’t be ruined this year and that they will be able to keep the shelves stocked. Investments in logistical solutions, warehousing and staffing will all help keep supply chains operating but companies seeking additional advantages can look to digital automated solutions to maximize the strategic value of their packaging and marketing at a time when time and cost savings will be critical. Sun Strategy is a leading provider of automated digital artwork and workflow solutions and experts in the retail sector, working with many big names to ensure Christmas 2021 is a success.
About the author
Kevin McAulay - Account Director
Kevin has over 20 years experience in managing print and graphics for multiple global FMCG and retail companies. Kevin has experience working onsite at a number of clients sites including Nestle and Unilever and managing remote teams, with a great understanding of stakeholder engagement across multi disciplines.
What’s your experience? Join the conversation on LinkedIn.
- Bloomberg Oct 2021
- ITV News Oct 2021