Some consumers stymied by price, availability of big-ticket buys

Many factors impacting the stability of the supply chain

The author(s)

  • Matt Carmichael Vice President, Editorial Strategy, North America
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There is a lot about the U.S. economy to celebrate as recovery continues. On the upside, pent-updemand and improving indicators in terms of confidence and employment, portend a solid recovery across many sectors. But the U.S. also faces a confluence of unpleasant factors that could hinder that rebound. First, prices on a wide array of goods and services are rising. Second – and related – supplies of both labor and raw material are suffering from shortages.

The latest Ipsos Coronavirus Consumer Tracker shows that these circumstances are leading many Americans to put off purchases. When asked about nine different types of potential big purchases, a near majority was putting off at least one of them.

Larger splurges in more everyday categories like dining and entertainment topped the list, but the results are fairly consistent, with only a few percentage points separating the top from the bottom.

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Air travel, new vehicles, home equipment and home purchases were all put off by about one in ten people.

When asked why, price was always the top factor. That was especially true for home purchases in a market described as a frenzy driven by investors and relocators alike. Anecdotes of multiple, all-cash, over-asking-price offers are dotting the media from the suburbs of large urban markets to vacation properties in more rural and scenic areas. A home in Washington, D.C., recently sold for $1 million more than the list price. In housing, demand and supply are tightly related. But lack of supply is also impacting sales across many categories, according to the Ipsos survey.

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CNN in May published a list of endangered goods – from gasoline to chlorine for pools to ketchup packets. One interesting takeaway was the range of reasons for the shortages. Chicken sandwiches are in high demand and seeing a labor shortage. Chlorine for pools is endangered due to a hurricane-damaged plant. Likewise, lumber shortages are also related partially to severe weather and climate change. Gas shortages are labor-related due to a lack of tanker drivers. Trade wars and climate change, plus the pandemic itself, are leading to the shortage of computer chips for cars and electronics. Rare earth elements are facing high demand, but declining deposits and increased regulation.

“Demand is on the rise vs. pre-pandemic expectations, but it’s often taking longer now to meet that demand,” said Ipsos Chief Client Officer Jason Brown. “At the same time, many consumers have become attuned during the pandemic to goods and services coming to them on their terms. It is quite possible this dynamic will impede full recovery beyond just the direct impacts of inflation and supply chain outages.”

All of this points to potential short- and long-term volatility in pricing and availability of the goods we have come to depend on, which presents an interesting tension in our increasingly on-demand, hybrid economy.

The author(s)

  • Matt Carmichael Vice President, Editorial Strategy, North America

Society