Major toy shortage possible this holiday season, retailers say

Store shelves during the holiday shopping season — and yes, we're talking about Hanukkah and Christmas just days after Labor Day — could prove to be merry but ever so tight.

A squeeze on inventory, including in the all-important toy category, could frustrate shoppers, as 82% of retail executives surveyed are somewhat or very concerned about inventory shortages, according to a new survey by KPMG.

And 55% surveyed plan to set up alternate suppliers.

"I can't remember a time when the concern about inventory was that significant," said Scott Rankin, national advisory leader for the consumer and retail team for the KPMG US Advisory practice in Boston.

Retailers are voicing early concerns about how they're going to stock shelves as they combat truck driver shortages, supply chain disruptions, congestion at the ports and the shortage of shipping containers.

Some toy makers are sounding the alarm and warning consumers about the possibility of empty spots on shelves during parts of the season. MGA Entertainment CEO Isaac Larian, whose company owns LOL Surprise! and Rainbow High dolls, told CNN Business: "There is going to be a major shortage of toy products this year."

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Some retailers are making a pitch directly with their loyal customers to explain some of the challenges ahead.

Grand Rapids, Mich.-based Koeze, which sells Colossal Cashews and other branded nuts and sweets, included a letter signed by its president, Jeff Koeze, discussing delivery and shipping concerns along with its holiday catalog that arrived in the mail this month.

The company told customers it is "experiencing shipping delays on many of the items we need." In addition, it said there have been delays in deliveries to customers. As a result, the letter asked that customers place their orders as soon as they can.

Many consumers have grown dependent on two-day shipping but this year ordering too close to the holiday could prove to be problematic, said Donald Cumming, Koeze vice president of marketing.

Other retailers are trying to get shoppers to treat September as the new December as well.

More cynical consumers might wonder if shortage scares can be self-serving prophecies to drive up prices and cover rising shipping and transportation costs. Can any shortage be real, after all, if you're willing to simply wait or buy something else?

But try telling that to someone on a desperate hunt for the season's hot toy. It won't do to wrap up a book when someone wants, say, a new Barbie Dreamhouse priced at $200 or a Lego Star Wars: The Child for $80, also known as Baby Yoda.

Retail executives believe prices may increase as much as 15% year over year, the KPMG survey showed. At the same time, 68% said this holiday season will be "much more" or "somewhat more" promotional than last year — think sales and store loyalty programs.

While no holiday shopping season would survive without big discounts, Rankin predicts that some deals may not be as good as they were historically early in the season.