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Is stockpiling making the usual Christmas storm more unpredictable than ever?

The strength of the supply chain bounce-back has been something to behold, but have precious Christmas stockpiles begun to dwindle? Louise O’Brien, Managing Director of Greyhound Box explores.
christmas stockpiling

It was only a year ago that retailers were scrambling to secure banks of packaging products in attempts to ride the notoriously busy wave of the festive period during a time inundated with supply chain issues. Fast-forward to the present day, and these precious stockpiles have begun to dwindle, if not almost completely depleted.

The strength of the supply chain bounce-back has been something to behold – product lead times are steadily re-establishing themselves close to, or as good as, pre-pandemic levels. And has been the case so many years before us, retailers are busy finalising scope for Christmas orders. Right? Not quite.

The unpredictable the Christmas corner

It’s a weird old time to be a manufacturer. Though the peaks and troughs of the last few years seem to have settled somewhat, there’s still a relatively eerie quietness throughout the market as a whole. Understandably so – what with the pandemic, supply chain chaos, and now cost-of-living crisis, all forecasting charts and graphs seem to have gone out the window.

Activities remain cautious, room for error marginal. Making it increasingly hard to determine which direction the upcoming golden period will take. Have the majority of consumers really revered back to the age-old cash withdraw to act as a budgeting tool and control disposable spending? Did they start saving for Christmas as soon as headlines shouting about the impending energy crisis hit to counteract the squeeze of a festive period battling the highest inflation rates in 40 years? And what does this mean for retailers usually up to their eyes in tinsel packing a mass of products onto shelves?

Beauty bounces back

According to a recent Retail Week and Retail Economics’ report, the only sector expected to see a rise in sales during the final quarter of 2022 is health and beauty. The continued post-pandemic rebound to the workplace and social scene has positioned the estimated 4.2% increase.

On the one hand, you’d expect this knowledge to stimulate beauty packaging suppliers’ production lines to run at full-throttle to accommodate the demand spike. On the other hand, you can’t help but appreciate order weariness – we’re only a few months into this new, inflation-driven landscape with the highest consumer price index since statistical models begin back in 1997. It’d be naïve to think we’re fully aware – or could accurately predict – its effects just yet. It could be an entirely different picture by the time those Mariah Carey tunes are reverberating around every supermarket.

Just-in-time VS stockpiling

Globally, we’ve long-favoured just-in-time supply chain– they help to optimise business efficiencies, maximise profits, and minimise waste. With the latest Chinese lockdown hopefully now firmly behind us, this time-sensitive model seems set to re-establish itself once more. In fact, container spot rates on all export routes from China fell at the beginning of August, a usually-peak season for demand. Is such a huge resurgence in capacity to transport goods the confidence-boosting signal we’ve all been waiting for? Or is it a warning for what’s to come?

With cash flows still relatively restricted, the phrase to be ‘stuck between a rock and a hard place’ has never felt more relevant. Should businesses stockpile products now to secure prices? That runs both the risk of under-ordering and unfulfillment, or over-ordering and having yet another stack of unused stock collecting dust in the warehouse. Or, should they wait it out a little longer and operate a reactive, rather than proactive, model this Christmas? Placing orders for stock in the knowledge that it’s actually needed being the obvious advantage, though chancing only recently-recovered supply chains buckling under sudden surges in demand.

Adding answers to the Christmas list

Is the answer out there? If it is, it’s certainly not concrete. But that’s not to say that there aren’t certain strategies retailers can be putting into place now to try and get as close to a solution appropriate to their business as possible. Closely observing patterns in consumer behaviour, watching the markets of trending products, keeping ears to the ground on the state of global transport and logistical operations. These might just be the presents to gift to yourself to ride out another unpredictable Christmas period.

About the Author: Louise O’Brien is the Managing Director of Greyhound Box, trusted supplier of corrugated cases. They specialise in consultation, bespoke design, and expert manufacturing of packaging solutions to help fulfil clients’ requirements. Solutions are sustainability-centric, with continuous innovations to ensure operational efficiencies and environmentally-responsible processes and products.

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