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Fake Christmas Trees the Latest Victim of the Pandemic

Artificial Christmas Trees Will Be More Expensive This Year

Decking the halls will be pricier this holiday season with retailers across the country raising prices for fake trees. Some retailers are hiking artificial Christmas tree prices by 20% to 25% to cover rising shipping costs. Others are warning that some trees could sell out early due to overseas delivery delays. Retailers which import their holiday trees and decorations are more exposed to the current disruptions in the supply chain than those which source products domestically.

Christmas tree customers are more sensitive to shipping delays because Christmas trees are for such a specific occasion. If a tree arrives after Christmas because of shipping delays, it has to be heavily discounted or stored until next season. It does not help that Christmas trees are hard to fit into shipping containers, which makes it more expensive for retailers to transport them. Artificial tree importers are paying about $20,000 per container and still cannot find enough containers to meet inventory orders in time for the holidays.

America’s Love of Fake Christmas Trees

Artificial trees make up the majority of Christmas tree sales in the US. Last year 85% of American households had a fake tree, which is nearly a 50% increase since 1992. As it stands the artificial Christmas tree market is between $1 billion and $2 billion in size.

But it’s not all bad news. The supply of live Christmas trees is expected to be improved from last year, when supply was tight due to light planting during the financial crisis of more than a decade ago. It takes about 10 years for trees to grow to the right size. This year there should be more than enough live trees to go around.

Retailers Already Preparing for Tree Shortage

Consumers who want to purchase an artificial tree this year may need to act ASAP. Retailers including Lowe’s (LOW) and Big Lots (BIG) said they have taken action in recent weeks to limit the impact from supply-chain delays. That includes placing orders for holiday imports earlier than in previous years. That means products are likely to show up in stores earlier. In July, US imports of artificial trees were up 45% year-over-year. Amazon (AMZN) and Wayfair (W) vendor National Tree Company already imported half of its artificial trees in June. Even so, it expects to import 10% fewer trees than planned.

The pandemic has created supply-chain difficulties which have impacted numerous industries. Now, the artificial Christmas tree market is feeling the effects. Retailers are working to adapt so their profits and their consumers don’t have a blue Christmas.

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ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

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