We’re heading into the new year amidst yet another COVID-19 surge.

But with the omicron variant more infectious and apparently milder than earlier strains, this wave looks different than previous ones, making it hard to figure out just how COVID will affect the economy going forward.

Let’s take a look at what that means in one particular industry: retail. Retailers are always trying to guess what shoppers will want to buy. What does that look like at this moment?

Really there are two parts to this calculation: Supply and demand. 

First, supply. We have seen shortages of all kinds of products.

So as retailers made decisions about what to put on shelves in early 2022 — and they have already placed those bets — “I think they placed the bets on this kind of current of optimism,” said Sonia Lapinsky, a managing director at AlixPartners. “And the fear that they don’t want to be left in the lurch and not have inventory available to meet demand.”

The shortages could get worse because of omicron. You need people to work at the factories, pack the boxes and drive the trucks that get products to stores. And people get sick. 

“I think a lot of that is going to be dependent on how flexible the supply chains are for these retailers,” Lapinsky said. That is, if factories are shut down in one place do they have other options? 

So, that’s supply. Then, we move on to demand.

Given the latest surge in COVID cases, are people going to keep shopping? So far, it looks like it, according to Dana Peterson, chief economist at the Conference Board.

“Consumer confidence picked up in both November and December, and that’s certainly despite the threat of the latest COVID-19 variant,” Peterson said.

Some shoppers will change their spending patterns. So, if you’re no longer going on that winter vacation to Saint Lucia, maybe you don’t need a new bathing suit. 

But overall, even in the worst parts of the pandemic, we know that people kept buying stuff — in particular electronics, appliances and home goods.  

“So they’re buying things because they can’t go out and go and travel and go to restaurants and hotels and that sort of thing,” Peterson said.

Peterson expects that to continue in 2022. And that’s good news for retailers, because two years into the pandemic, they generally have a sense of which stuff you want.