By NEIL HARTNELL
Tribune Business Editor
A well-known Bahamian retailer is advising locals “to shop early because prices will not be going down” with transport costs accounting for an “extraordinarily high” 20 percent of product costs.
Andrew Wilson, the Quality Business Centre (QBC) and Fashion on Broadway principal, told Tribune Business that post-COVID demand and supply chain woes mean that consumer goods prices are unlikely to start declining before the second half of 2022.
Suggesting that all retailers will “have some holes” in their inventory this Christmas shopping season, he nevertheless forecast that his retail formats will perform as well as in past festive periods due to counter-balancing factors - not least the tighter US vaccination and testing requirements, which may prevent or deter many Bahamians from heading to the US retail giants.
“The supply chain is really impacting everybody,” he told this newspaper in a recent interview. “Having said that, I do have inventory. There are holes in my inventory that I would be happy to fill, but there are things one can control and things one can’t, so I will still be focused on selling the products I have.
“We’re going to do as well as we’ve done in seasons past at the very least. No question about it. The demand is there. Number two, with the requirements for vaccination and testing to travel to Florida, that means more people will be shopping locally. I think a greater percentage of local monies will pass through local hands.”
Mr Wilson said such trends were seen during the recent Black Friday/Thanksgiving holiday shopping window, and he added: “I’m sure that augurs well for all merchants in the mall [at Marathon]. I think it will be substantial provided one has inventory, and to the extent there are holes in the inventory I think probably every merchant finds themselves in that position.”
With consumers set to make purchasing choices “based on availability”, the QBC chief said inflation stemming from the global supply chain’s inability to meet post-COVID demand would inevitability be passed on to Bahamian consumers via a variety of cost hikes given that this nation produces so little of what it consumes.”
Listing gaming devices, the Play Station gaming system and printers as just some of the electronic products that are challenging to acquire, Mr Wilson added: “We are still aggressively pursuing our vendors to secure those products.
“The cost of goods is going up for a variety of reasons. We’re finding that some of the transportation costs from the point of origin to Nassau may cost as much as 20 percent of the cost of goods. That’s extraordinarily high. A good yardstick is that a container out of China to North America and The Bahamas was about $6,000 to $7,000. Now it’s more like $23,000.”
With deliveries that used to take five weeks now taking double that time, such as ten weeks, Mr Wilson said supply chain difficulties had been worsened by the “crazy trucking rates” now being charged to move goods from California and elsewhere to the Florida ports for shipping to The Bahamas.
Asked what he would tell Bahamian shoppers in the Christmas run-up, he added: “I would advise them to shop early because the prices will not be going down. We won’t see a downward trend in prices until at the very earliest mid to late 2022. It might go longer depending on how everything pans out. It’s not going to get any better between now and the end of the year.
“For me, I’m expecting a strong Christmas. We’re expecting a good season. We’ve put in the hard work straight through the pandemic, and we have every expectation that our efforts will bear fruit. At the very least we expect it to be as good as 2019. Monies will be tighter, and salaries lower, because of all the additional costs that will be passed on, but I expect it to be as good as 2019.”
Asked how he planned to counter the online shopping competition, Mr Wilson said: “The online merchants are pretty much here to stay. There’s nothing one can do about it except sharpen your pencil and purchase smarter.” He asserted that “small electronic items”, sourced from China, were cheaper in The Bahamas than prices on Amazon and in the US.