Goods and Services That Will Be More Expensive in 2021
The COVID-19 pandemic has had a significant impact on the U.S. economy, shutting down businesses, stalling industries and wiping out jobs. From disrupting supply chains to delaying the time it takes for certain products to be made or services to be offered, many industries have experienced huge economic losses. As these companies figure out how to recover in the coming years and as consumer demand for many items and services remains strong, experts predict an increase in the prices of many things, ranging from food to healthcare.
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Take a look at 20 such things that you can expect to pay more for in 2021.
Last updated: May 17, 2021
Groceries
COVID-19 has put a real strain on food supply chains. As a result, the cost of household groceries in the U.S. increased by 4.1% since the start of the pandemic. While that may not sound like much, it’s the steepest increase in 50 years and a sign of economic stress. Consumers will likely notice this as their paychecks don’t stretch quite as far.
See: 9 Best Grocery Delivery Services That Are Worth the Money
Dairy
If you love your big bowls of milk and cereal, a milk chaser with your dinner or milk and cookies, you’ll likely be paying more for your dairy delights; the cost of dairy has risen by as much as 10% according to the Bureau of Labor Statistics (BLS) Consumer Price Index Report.
Check Out: 25 Companies Making the Money Money From COVID-19
Beef
You might also think twice about big steak dinners or frequent burgers. The BLS reports that the beef index rose an astonishing 10.8%, a record height for this index. These numbers will quickly add up in your trips to the grocery store.
Read: 16 Ways To Save Money on Food Now That Prices Are Rising
Eating Out
While eating in is likely to get more costly, so is eating out. In order to make up for significant losses during COVID-19 related shutdowns, which hit the restaurant industry in a big way, and to accommodate those steeper prices for groceries mentioned above, restaurants are likely going to have to raise their prices to survive -- at least until people can eat out normally again.
Clothing
The pandemic hit the apparel business like a sledgehammer. Brick-and-mortar stores saw a reduction in consumers due to shelter-in-place restrictions, and people defected to ordering online at sites like Amazon. Left with clothing they couldn’t sell in big stores, the industry took a massive hit. As a result, experts predict they’ll have to make up for losses by raising prices.
Handbags
If you’ve been coveting a Hermès, Gucci or Louis Vuitton bag, post-pandemic will not be the time to indulge your luxury fix. These bags will earn their reputation for high prices even more in 2021. “Many leading brand names have increased prices during the pandemic because of the continuously rising costs of raw materials,” Brian Patrick, home expert and CEO of Pest Strategies, told Reader’s Digest. “Restrictions and difficulty in international cargo shipping are reasons for the price hike.”
Mail and Postage
Despite an increase in shopping by mail, the United States Postal Service (USPS) has felt the strain of COVID-19 on its bottom line. It announced that it will raise its prices for first-class mail by 1.8% and all other categories by 1.5% in 2021.
The forever stamp will remain at 55 cents but other stamps will increase by 1 cent. Additionally, the cost per ounce for a single-piece letter will increase from 15 cents to 20.
Computers and Electronics
Computers and electronics have now become essential to households in the pandemic, with many children attending remote schools and many businesses conducting operations via Zoom. These items will continue to increase in price, but not just from consumer demand; disruptions in the supply chain of the parts needed to make computers and other electronics have added to delays and lower profit margins for these companies. The companies compensate for their losses by increasing prices.
Video Games
Perhaps to the dismay of parents everywhere, video games have seen an explosion of video game playing during the pandemic. Sara Skirboll of RetailMeNot told Reader’s Digest that her site saw “a 95% surge in demand for video games from March to mid-June compared to the previous year.”
However, some big factories have experienced disruptions in the supply chain that have slowed down production. Experts predict video game consoles will be pricier next year as demand stays high.
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Textbooks
School may be mostly virtual since the pandemic, but it hasn’t halted textbook sales at all. New textbook sales have increased, and with that, their prices as well, according to CampusBooks.com, a textbook price comparison website. In April, new textbook purchases were up 30% from the prior year. It was assumed this was due to concerns about COVID-19 contamination on used books. With demand high, the site predicts prices will keep rising into 2021.
Home Improvement Supplies
It’s probably no surprise that people stuck at home during the pandemic have become suddenly interested in home improvement. According to AdWeek, retailers including Lowe’s, Home Depot and Ace Hardware saw huge sales throughout the pandemic. And, according to the U.S. Department of Commerce, building material and garden sales for May 2020 increased by more than 6% from the prior year. Consumer demand is likely to drive these prices up next year.
Furniture
All this time spent indoors has driven many people to upgrade their home furnishings. An April 2020 report from Research and Markets showed a surge of sales from such online furnishing retailers as Overstock.com and Wayfair. Sales like this almost always precede a rise in prices, the experts conclude.
Home Fitness Equipment
The pandemic drove a burst of fitness inspiration, and consumers started snapping up home fitness equipment left and right. In fact, a quarter of respondents in one survey said they didn’t think they’d ever go back to a regular gym, so those barbells, kettlebells, stationary bikes and more will likely continue to be in high demand -- and thus pricey.
Read More: Things To Cut Out To Save Money During a Health Crisis
Health Insurance Premiums
The COVID-19 pandemic is already leading to an increased cost of healthcare insurance premiums. Experts say it is a response to absorbing the costs of making COVID-19 tests free or affordable and other expenses related to the virus. Many consumers have already received notification of a coming increase in their premiums, particularly for commercial insurers like Blue Cross Blue Shield, Aetna, Humana and Cigna, of between 4% to 40% for 2021.
Out-of-Pocket Healthcare Expenses
With increased health insurance often comes increased out-of-pocket medical expenses, including copays and medications. People can expect to pay several hundred dollars more in 2021 for these extraneous healthcare costs.
Sanitation Supplies
Just after the pandemic hit, store shelves all over the U.S. sold out of products ranging from hand sanitizer to disinfectant to just about any sanitation product that could normally be found in abundance. CNBC reported that sales of sanitizer were up 255% in February 2020. While manufacturers have caught up with production, the demand remains high and likely will stay that way.
Energy Bills
Economies may have slowed down due to coronavirus shutdowns, but the wheels of energy production keep on turning -- and at a cost. Not only are people using more energy in their homes since they’re in them more often, but experts predict the cost of energy to increase by 2.8% next year. The states that will probably see the highest rate hikes are New Jersey, New York, Connecticut, inland California, Michigan, Massachusetts, New Mexico and Illinois.
Homes
If you’re waiting for the seller’s market to calm down and buy a new house in 2021, you might want to take a pause. The real estate market is booming and may continue to do so at least through the first half of 2021. While the end to the moratorium on evictions and foreclosures as a result of the pandemic may catch up in the latter half of the year, for now, the market remains hot.
Airplane Tickets
While airlines have had to adapt to significantly limited numbers of travelers by keeping ticket prices low, as more people begin to travel in 2021 and beyond, ticket prices are expected to increase sharply by as much as 27% well into 2025, according to industry experts. These fees may not only be the ticket price itself but an increase in baggage fees, cancellation fees and change fees.
Social Security Gaps
Though it's not a product or service, people who receive Social Security funds may be struggling even more. While they will get a small cost of living adjustment of 1.3%, experts say that this raise, and Social Security itself, has not been able to keep up with inflation. So, in essence, people living on Social Security will find that everything is more expensive because their income will not be compensating for inflation.
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