The Tribune

• Tells consumers to brace for ‘across the board’ hit

• TV price rises of 10-15% since 2020 a barometer

• Delivery times ‘substantially retarded’ by bottlenecks

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamians were yesterday warned to brace for “across-the-board” price increases and stock shortages until mid-2022, as a prominent retailer warned: “The chickens have come home to roost.”

Andrew Wilson, the Quality Business Centre (QBC) and Fashion on Broadway principal, told Tribune Business that “the price of everything” is increasing due to manufacturing disruptions and supply chain bottlenecks caused by the fall-out from the COVID-19 pandemic’s health restrictions.

Citing the ten to 15 percent increase in TV prices since 2020 as indicative of what is happening in the wider economy, he added that product delivery times for Bahamian merchants have been “substantially retarded” with the previous five-week wait for shipments from China having expanded to eight to ten weeks.

With shipping costs having also escalated due to a container shortage and supply chain disruption, the retail entrepreneur predicted that it might be another 12 months before Bahamian consumers and merchants experience any easing.

With food and construction material prices having already soared, Mr Wilson said: “The price of everything is increasing. Everybody has to pay for the pandemic losses through the last 15 months. It’s in everything we do. The biggest challenge is the supply chain. Shipping costs have more than doubled. Whether you buy from China or the US, shipping costs have increased globally.

“Whether you buy in New York, Miami, California, China.... at the end of the day, we have a hard road to tread. The prices are the prices. In this economy it’s about keeping the wheels turning. There are no buyers lining up at your door to buy product. It’s about staying alive, keeping your staff and employees.

“The cost of TVs, for instance, has increased by about ten to 15 percent in the past year. I think that’s probably held true for across the board for a variety of products. Prices are going up and there are shortages,” he continued.

“It takes forever to get everything. I’ll tell you that out of China, what previously took five weeks it’s now more like eight to ten weeks. Florida is pretty much consistent, but across the board delivery time has been substantially reduced.”

Mr Wilson warned that supply chains to The Bahamas could face further disruption from COVID-19 outbreaks in major source markets for products, which may force a further tightening of health restrictions overseas. He indicated this was already happening, with one Chinese supplier in “a major hub” having informed him of a resurgence in infections there.

“We’re going to have ups and downs for the remainder of 2021 without a doubt,” the QBC chief told Tribune Business on price and inventory disruption. “It looks like 2022, mid-2022, we’ll be able to breathe a sigh of relief and be out of the woods.

“It’s going to be a rough ride, but hopefully by mid-2022, in the absence of some new COVID strain impacting us, we should see some improvement. The cost of everything is going up, the price of everything is going up. The chickens have come home to roost.”

Mr Wilson said consumers and their spending have effectively been “disemboweled, for lack of a better word”, until jobs and disposable incomes - especially in the hotel industry - recover from the COVID-19 fall-out. His retail businesses have seen only a minor increase in the amount of US dollar bills passing through their tills since last year, indicating tourism remains depressed.

“Whereas before we were seeing a handful of $5m, $10 and $20 US dollar bills, we’re seeing one or two $50 and $100 bills in circulation. That’s expected to improve, but overall the US dollar is still absent.”

Mr Wilson spoke after a prominent economist warned earlier this week that rising inflation poses “a very significant” threat to the speed and strength of The Bahamas’ post-COVID economic revival.

Rupert Pinder, who lectures on economics at the University of The Bahamas, told Tribune Business that the sustained and escalating price increases being experienced in key sectors - especially construction and food - and over which this nation has little influence could undermine prospects for a faster rebound from the pandemic.

Speaking after Rupert Roberts, Super Value’s president, warned consumers to brace for grocery and meat prices increases of eight percent and ten to 12 percent, respectively, by Christmas, he added that “the domino effect” of increased construction input costs could rob another industry of vital impetus.

The government is relying heavily on construction to lead the post-COVID revival, and absorb some of The Bahamas’ record unemployment levels, but Mr Pinder said inflationary impacts imported from abroad “can dampen any sort of growth prospects” in a variety of ways.

He warned that The Bahamas’ consumption-based tax system - with its reliance on border duties and VAT - only serves to worsen the impact inflation has on imports.

And, while there will be no impact on the one:one exchange rate with the US dollar, he said its “real value” - on a purchasing power parity (PPP) basis - will be weakened by the sustained price increases for key products. If inflation results in subdued economic growth, Mr Pinder said the impact will also filter through to government revenue projections that many already view as overly-optimistic.