Toys for Tots prepares for supply shortage this holiday season

The U.S. Marines Toys for Tots charity program is anticipating higher prices and a smaller supply of toys this holiday season.

Hasbro and Mattel both noted concerns in recent earnings calls, citing supply chain disruptions stemming from the COVID-19 pandemic due to bottlenecks that have caused shipping delays from China and higher freight prices, among other things.

"We've been seeing this across many industries," Brock Pierce, businessman and vice-chair of Toys for Tots in New York City, Long Island and Puerto Rico, told Fox News. "This is the impact of shutting the world down. … This is what happens when you make production and supply chains slow down, create bottlenecks. And now we're seeing the impact of it, which is a shortage of all sorts of things."

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Electronics and recreational goods like bicycles are likely to face shortages and higher prices this holiday season, as well. Consumer products with components made in and around China may be impacted by supply chain disruptions and higher costs for material and labor, coupled with increased demand come November.

Hasbro CEO Brian Goldner said during the company's second-quarter earnings call Monday that the company "successfully established price increases that go into effect during the third quarter and provide an offset to the rising input and freight costs in the business."

"These supply chain pressures are meaningful. But given the strength in our business, the actions we have taken, combined with our global footprint, we continue to believe we can meet our full-year targets," he said.

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The company didn't say exactly how much it would raise prices. But in response to an analyst's question, Goldner said that a 10% hike would be "a bit high."

Pierce is concerned that low-income families who were most severely impacted by the pandemic and lockdowns may bear the brunt of supply chain shortages this holiday season.

"As we know, children need consistency. They have had their educational programs, their schooling, their activities disrupted in a very big way. … It's something that stands out as deeply concerning right now," he said. 

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Americans didn't see the same disruptions last winter despite shuttered stores and factories. The industry even recorded 16% sales growth in the U.S., as The Wall Street Journal first reported, citing the market research company NPD Group Inc.

This year, however, shipping woes that could delay the amount of time it takes for toys to get from China onto store shelves and higher costs are leading experts to anticipate a very different outcome.

Pierce noted that the toy industry used to keep larger inventories until "modern manufacturing" allowed sellers to keep smaller inventories. Now, with global supply chain disruptions, those smaller inventories are part of the larger disruptions.

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If there is ever a time for those in a position to donate toys and other items to those in need, it's the upcoming holiday season, Pierce said.

"There is an opportunity here for those of us with means to utilize those means to make an impact," he said, adding that he hopes the possibility of fewer donations this year isn't the outcome of toy shortages and higher pricing.

"The outcome is not yet written. It's up to us. Let's see what we do," Pierce said.

Fox Business' Breck Dumas contributed to this report.