10 Things That Are About to Get More Expensive
Get ready to shell out even more for some of your go-to items, thanks to the ongoing pandemic.
The price of the pandemic
If it seems like everything costs more these days, you’re not imagining it. The coronavirus pandemic continues to pique unprecedented demand for certain types of products, even creating shortages. At the same time, the supply chains that manufacturers and retailers depend on to meet those demands have been disrupted. In fact, in December, production costs rose to their highest level since May 2018, “likely reflecting bottlenecks in the supply chain caused by the virus,” according to CNBC.
If you remember your grade school economics lessons, you know that when supply decreases or demand increases, prices rise. In the current situation, however, we are seeing both forces at once. “As a direct result, we should expect to pay more on several [types of] goods and services going into 2021,” notes Jill Gonzalez, an analyst at WalletHub. We break them down below. To balance out these rising prices, it’s more important than ever to know the best times to find the steepest sales on everything you need.
Computers and electronics
Electronic items, like tablets, webcams, and all the other items on this year’s list of most important school supplies, have become more central to our lives than ever before, with so many people still working and attending school from home. The cost of tech tools is anything but straightforward, however. “Most people don’t understand how insanely complex supply lines have become, especially for high-end electronics,” explains Monica Eaton-Cardone, COO of Chargebacks911, which helps companies manage business costs. “Rare earth metals are mined in one part of the world, assembly might be somewhere else, and all kinds of other parts and pieces are sourced, tracked, and delivered in an intricate system of factories for international fulfillment. When even a small breakdown in that chain occurs, expenses rise, productivity is stalled, and profit margins shrink—and that means higher prices for smartphones, computers, and other electronics.
The price of food worldwide broke a six-year record in December, and it’s easy to see why. “Grocery stores are facing higher expenses to keep customers safe,” says Kimberly Palmer, a personal finance expert at NerdWallet. They may need to hire more staff to meet amped-up sanitation guidelines, for example, while limits on the numbers of customers inside a store keep revenue down. Many grocers also began offering their employees more health insurance benefits to keep them safe, too. “Of course, those [costs] ultimately get passed on to consumers,” Palmer says. For these reasons, she expects grocery prices to remain high—at prices that were probably inconceivable the year you were born.
Other parts of the food supply chain—like production and transportation—are seeing similar challenges. That helps explain why Gonzalez thinks food eaten at restaurants also will become more expensive in 2021. “Restaurants have been hit hard by the pandemic,” she says, “and will most likely try to compensate for the losses they incurred last year.”
Furniture and decor
As people continue to nest at home instead of going out, they’re spending a lot of money to make their homes as comfortable and functional as possible. “Anything in the home-goods category continues to see high demand and often higher prices—especially for items that are selling out or hard to get,” Palmer says. In fact, the furniture industry is anticipating a 4 percent growth rate in 2021. With demand eating up inventory, the sale prices that many bargain hunters wait for are few and far between. But Palmer says if consumers are flexible, they may be able to find cheaper substitutions for hot-ticket items. For example, these 50 under-$50 finds at Target only look expensive.
Gasoline prices jumped 8.4 percent in December, after two consecutive months of falling prices. According to a CNBC interview with Patrick De Haan, head of petroleum analysis at GasBuddy, some of the new demand is coming from people who are returning to work in offices and commuting by car rather than using public transportation. “Overall, I think there’s more likelihood that prices will rally in 2021 compared to 2020 as Americans at least start to try to learn how to live in this pandemic environment,” De Haan told CNBC.
De Haan’s assessment is echoed on Wall Street. According to Fast Company, the prices of crude oil are being driven up by…wait for it…optimism. Traders, fueled by hope as vaccines are rolled out and by the belief that the worst of the pandemic is behind us, are betting on higher demand for gasoline in the near future. By the way, here’s how Costco keeps its gas prices so low.
Home exercise equipment
When COVID-19 first shut down gyms and recreation centers, and even later as they reopened with limited capacities, demand surged for home fitness equipment such as exercise bikes, treadmills, and rowing machines. That interest has not subsided. According to the NPD Group, home fitness equipment sales nearly doubled in the third quarter of 2020, compared to the same period the year before. Outdoor equipment—like trampolines, bicycles, and golf equipment—also saw record sales. All this increased demand and low supply means higher prices for your at-home sweat session, and that’s not changing anytime soon, as gyms may never be the same after the pandemic.
Couples worldwide had their wedding dreams dashed in 2020 when large gatherings were banned due to the pandemic. Also dashed were the incomes of wedding planners, venue owners, photographers, musicians, florists, caterers, and everyone else in the normally $50 billion-plus industry. Now, with restrictions easing in some areas and vaccinations on the horizon, weddings are being rescheduled for 2021 and 2022, increasing the demand on a fractured industry. According to the Wedding Report, some 650,000 more weddings than usual are expected in 2021. Prices, predictably, are rising. Brides magazine reports that those who did manage to pull off a wedding in 2020 spent almost $29,000. Plan accordingly, and consult this list of creative ways to cut your wedding costs.
Video games and entertainment
Couch lock is real. We’ve collectively spent so much time playing Animal Crossing and Minecraft that the video game industry broke new records in 2020. Americans spent $57 million last year on video games and consoles, an increase of a whopping 27 percent over the previous year.
When we’re not playing games, we’re apparently watching Netflix, Disney+, Hulu, or some other streaming media service that helps us forget that there’s not much else we can do indoors during the pandemic. With our demand for at-home entertainment continuing to rise, most content providers are raising their prices by a dollar or two per month for 2021. Maybe it’s time for a good book. Start with these 60 sizzling romance novels or these 13 best-selling science fiction books, if that’s more your thing.
People stuck at home are keeping the lights on and running the heat and the A/C more than they would if they were in an office all day. The Energy Information Administration is anticipating that consumers will use 5 percent more energy for heating this winter, as well as 5 percent more electricity and 1 percent more propane and natural gas for non-heating uses, such as running appliances. Typically, higher demand drives up the costs, and experts expect that energy bills in 2021 will rise. To compensate for this, you’ll definitely want to check out these 13 clever ways to slash your home energy bills.
It’s no secret that the U.S. Postal Service has been struggling. Last November, it announced a price increase for 2021, which took effect on January 24. While the Forever stamp for a first-class letter still costs 55 cents, all other stamp prices have increased by a penny. (It still seems like a pretty good deal to us, especially considering what could happen if the USPS stopped delivering mail.) Other services, like Priority Mail and Media Mail, did see larger increases, however, and oversized packages now have a $100 fee tacked on.
Given that we’ve mostly rotated from our night pajamas to our day pajamas (aka sweats and tees) for the past year, it’s no surprise that clothing sales fell dramatically in 2020—by around $12.4 billion. The good news: Clothing manufacturers see our desire for comfort and versatility, and they are beginning to innovate in the “athleisure” space. We’re responding by spending up to 11 percent more for this type of clothing than for other types of apparel.
More formal types of clothing haven’t fared so well. In 2020, many retailers ended up with large volumes of apparel they couldn’t sell, and the common wisdom is that they will probably have to raise prices in the future to recover. Others have decided to hold onto their excess inventory and “repurpose” it in 2021 at full price. While retail strategies may differ, they do have one thing in common: Clothing prices are already beginning to climb, notching a 1.4 percent increase in December. That means it’s a good time to learn a few fashion secrets from personal stylists so you can elevate your look without spending a bundle.
For more on this developing situation, including how life might be different post-lockdown, see our comprehensive Coronavirus Guide.
- CNBC: “Gasoline pushes U.S. consumer prices higher in December”
- Jill Gonzalez, an analyst at WalletHub
- Monica Eaton-Cardone, COO of Chargebacks911
- Bloomberg: “Global Food Prices at Six-Year High Are Set to Keep On Climbing”
- Kimberly Palmer, a personal finance expert at NerdWallet
- Furniture Today: “Furniture industry expected to grow by 4% in 2021”
- CNBC: “GasBuddy expects recovery in fuel spending in U.S. after Covid caused $100 billion decline”
- Fast Company: “Why are gas prices rising? Here’s the weird but simple reason you’re paying more right now”
- The Wedding Report: “2020 Covid-19 Wedding Market Impact”
- Brides: “Why You Can Expect to Spend More on Your 2021-2022 Wedding—and How to Save on Costs”
- NPD: “Fourth Quarter 2020 U.S. Consumer Spending on Video Game Products Increased 26% While Annual Spend Gained 27% Compared to 2019”
- Cheapism: “15 Things That Will Cost More in 2021”
- U.S. Energy Information Administration: “Winter Fuels Outlook”
- USPS: “U.S. Postal Service Announces New Domestic Competitive Prices for 2021”
- Research and Markets: “Clothing and Clothing Accessories Stores Global Market Report 2020-30: COVID- 19 Impact and Recovery”
- Quartz: “Retailers are holding 2020 fashion for 2021 to avoid discounts”