Christmas costs set to soar: Families face crunch on festive budget
Christmas costs are set to soar: Families are facing the crunch as panic buying and rising cost of toys and food starts to bite on festive budget
- Strong evidence panic buying Christmas toys, other products has already begun
- Toy producers Barbie and Lego have said they are selling ‘Christmas quantities’
- 75 per cent more Christmas puddings have been sold already compared to usual
- Chancellor Sunak has insisted there will be a ‘good amount’ of presents available
The soaring cost of Christmas was laid bare last night amid rising prices on Chinese imports as well as higher petrol, energy and food bills.
Products leaving factories in China cost 10.7 per cent more last month compared with the same time last year.
It is the highest rise in 26 years amid runaway energy and commodity prices.
Analysts expect this to make white goods, electronics, furniture, games consoles and many other products more expensive.
Separately, there is strong evidence that panic buying of toys and other products has already begun, with brands such as Barbie and Lego selling at ‘Christmas quantities’.
There has also been a surge in sales of frozen turkeys, while 75 per cent more Christmas puddings have been purchased than usual at this time of year.
The soaring cost of Christmas was laid bare last night amid rising prices on Chinese imports as well as higher petrol, energy and food bills
Disruption at Britain’s ports threatens shortages of many products, with Ikea warning that supply problems could continue for another 12 months. Jon Abrahamsson Ring, chief executive of its parent company, said: ‘This is here for a longer period than we thought of at the beginning of the crisis.’
The British Retail Consortium (BRC) warned that three in five retailers will be pushing up prices in the coming weeks.
Its director of food and sustainability, Andrew Opie, said: ‘There are clear signs that the cost pressures from rising transport costs, higher energy and commodity prices, and ongoing labour shortages, all of which are starting to filter through to consumer prices.’
He insisted the only way to stem increases is for the Government to change visa rules to allow in more foreign workers who are needed to fill vacancies across the economy.
Ministers have made some small changes to visa rules to allow in 5,500 HGV drivers, 5,000 workers in poultry processing and some 800 butchers to handle pigs and pork.
Products leaving factories in China cost 10.7 per cent more last month compared with the same time last year and Lego and Barbie have said they are already selling at ‘Christmas quantities’
However, the BRC, farmers and the rest of the food industry say this piecemeal approach will not make a significant difference.
The recent petrol panic means the cost of fuel to business and the public has surged, which will feed through to delivery and shopping basket costs.
While an energy price shock, with the cost of gas and electricity, will push up the price of manufactured goods, everything from the metal used in new cars to bricks, dinner plates, paint and industrial chemicals.
Just this week, major food firms have warned that prices, everything from chicken to baked beans, will have to cost more as part of a move to permanently higher prices.
The ‘Chicken King’, Ranjit Singh Boparan, owner of the 2 Sisters Group, said: ‘The days when you could feed a family of four with a £3 chicken are coming to an end.’
The Bank of England recently predicted the annual inflation rate will rise above 4 per cent by the end of the year. Some economists predict it could go on to reach 6 per cent next year.
Against that background, there is a chance of a rise in interest rates, which will hit borrowers and those with variable-rate mortgages.
This week, Conservative Party co-chairman Oliver Dowden said there was no need to panic buy toys or anything else before Christmas. This message was repeated by Chancellor Rishi Sunak in the US yesterday.
But the boss of The Entertainer store chain said sales of some expensive toys are already running at the levels expected immediately before Christmas.
These include the Barbie Day to Night Dreamhouse Playset, at £249.99, and the Barbie 3-in-1 Dreamcamper Playset, £83.99.
Figures from retail analysts Kantar show sales of games and puzzles are up by 15.3 per cent, baby toys by 10.8 per cent and gift wrapping products by 9.3 per cent (pictured, Hamleys)
Lego has seen a sales boom through the pandemic but analysts have warned of shortages of some sets. Stocks of big brands such as L.O.L. Surprise!, Baby Annabell and Sylvanian Families are also under pressure.
Sales of cosmetic gift sets over the past four weeks are up by 128 per cent on the same period last year, with the figure for mixed beauty sets some 64 per cent higher.
Figures from retail analysts Kantar show sales of games and puzzles are up by 15.3 per cent, baby toys by 10.8 per cent and gift wrapping products by 9.3 per cent.
The Entertainer along with other retailers have suffered delays in deliveries due to disruption at the UK’s biggest container ship port, Felixstowe.
Thousands of containers are sitting at Felixstowe and other ports because there are not enough drivers to collect them.
As a result, the firms who own these shipments are being hit with penalty fees by the ports.
Transport sources have declared that the fuel crisis which gripped the country at the start of this month, was now ‘over’.
A source said that all regions, including the worst-affected areas of London and the South East, were now at ‘average stock levels’.
However, military drivers are expected to continue assisting in the short term as a ‘precaution’.
Mr Sunak insisted yesterday that there will be a ‘good amount of Christmas presents available’ despite supply chain issues.
Speaking to the BBC in Washington DC, he said: ‘We’re doing absolutely everything we can to mitigate some of these challenges.
‘They are global in nature so we can’t fix every single problem but I feel confident there will be good provision of goods for everybody.
‘I’m confident there will be a good amount of Christmas presents available for everyone to buy.’
Mr Sunak insisted yesterday that there will be a ‘good amount of Christmas presents available’ despite supply chain issues
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