COSTA MESA, CA - JULY 13: Shoppers wear masks while shopping at South Coast Plaza Monday, which will be closed down Tuesday for a second time by Gov.
Newsom in an attempt to slow the spread of coronavirus on Monday, July 13, 2020 in Costa Mesa, CA. C And there are new pressures that could send prices even higher, namely the Russian invasion of Ukraine.
Most Western companies including retailers like Nike, fast-fashion retailer H&M, and coat maker Canada Goose have suspended sales in Russia after Russia sent tank columns toward the capital of Kyiv and heavily shelled the southern seaport of Mariupol and other urban centers.Many retailers are bracing for how the war will worsen supply shortages, with reports already surfacing of limited supplies of wheat, vegetable oils, and electronic components like chips that will likely send prices higher.
In addition to the Russian invasion, rising COVID-19 cases and renewed restrictions in China could intensify supply chain issues.RELATED: Uber, Lyft add fuel surcharge as gas prices soarCostco memberships may cost more this summer"The problem is that as households get more and more squeezed on essentials, there is less budget available for discretionary spending," said Neil Saunders, managing director at GlobalData Retail. "True, there is an elevated buffer of savings which consumers can call upon to fund their consumption, but this is a short-term fix in an environment where inflation is becoming a persistent problem."Saunders noted that such persistent inflation is dangerous for retailers because it will mean shoppers will once again consolidate their spending and spread it to just a few players, reversing the trend where many retailers in the last year or so saw their sales.