USC Today
Source Alert

This week: Experts talk turkey about consumer behavior and why that bird on the dinner table costs more this year

Greetings from USC Media Relations. USC experts are available to discuss why 2022 is a bad year for turkeys and how that’s likely to affect the cost of your traditional Thanksgiving meal. In addition, inflation and continued supply chain troubles will likely impact consumers’ Black Friday shopping experience.
November 21, 2022

 

Contact: USC Media Relations at uscnews@usc.edu or (213) 740-2215

Geopolitical issues drive the uncertainty of the turkey supply

“Just when we thought we had been through COVID and associated supply chain issues such as labor shortages, port backlogs, inflation, and continued geopolitical tensions, we are now faced with a new strain of avian influenza which has eliminated more than 6 million turkeys nationwide,” said Nick Vyas, an assistant professor of clinical data sciences and operations at USC Marshall.

“That’s about 14% percent of the nation’s total turkey production, according to U.S. Department of Agriculture (USDA). It’s estimated that hundreds of thousands more turkeys had to be euthanized to prevent further infection. Food prices are predicted to increase between 4.5% and 5.5% this year.

“The supply chain issues will continue to impact the holiday season,” said Vyas, an expert in global trade and supply chains. “Some items and inventory levels will be very volatile as we continue to manage the supply and demand cycle. The backlog at the ports has eased, but we still have issues with inflation leading to higher costs, the Russia-Ukraine crisis, and China’s continued policy on zero COVID. Apple announced that supply coming out of China would impact iPhones and many other commodities.

“The uncertainty of the supply chain, in my view, will continue well into 2024. So we have another 12 to 18 months of dark clouds hanging over our supply chain networks.”

Contact: nick.vyas@marshall.usc.edu

How does the price of a turkey compete with nostalgia?

“Inflation is certainly impacting consumer behavior, but the financial constraints caused by inflation should not be expected to impact all purchases, especially those that have deep emotional connections,” said Jorge Abram Barraza, an assistant professor of consumer psychology at USC Dornsife. “The price of a turkey varies substantially, but a 7% increase translates to only a few dollars more for a bird. It is hard to believe that a few dollars will get in the way of tradition and nostalgia.

“In fact, what we should expect is that grocers will be willing to absorb a bit of that increase in order to strengthen consumer relationships and bring more holiday shoppers into their stores. Walmart, Aldi and a few others have already mentioned they are keeping prices at 2021 levels or lower than inflation.

“Where we might expect consumers to be hit are those that wait longer to get a bird. If costs do not lead to a drop in consumer demand and supply is not keeping up with demand, there will be many families seeking alternatives for the holiday. That can result in a break in tradition. Since traditions are similar to habits (behaviors we do without much deliberate thought), many families may start to move beyond the turkey this holiday season.”

Contact: jabarraz@usc.edu

Pent-up demand expected to spark consumer interest, though product availability will be uneven

“With consumers worried about inflation, there will probably be considerable pressure on retailers to make good deals available to consumers,” said Lars Perner, an assistant professor of marketing at USC Marshall. “Many retailers committed to large order quantities a year or more ago, and may even have locked in prices, since manufacturers often give retailers large discounts for ordering so far in advance.

“Availability of different types of products may be uneven, so shoppers who are more flexible in their choices will likely be more successful. With a lot of pent-up demand from last year, when supply chain problems limited the assortment of gifts available, there may be considerable consumer interest in holiday gifts this year.

“In post-pandemic times, more consumers who liked to shop in person before will have come into the habit of shopping online. It is likely that sales will continue to start earlier and earlier, with Amazon already having a second Prime Day earlier this fall.”

Contact: perner@marshall.usc.edu

# # #

 

Related Articles

More Stories