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‘Rolling With The Punches’ Over Retail Make Or Break

• Supply chain crisis leaves ‘gaps’ on shelves

• $3,200 freight quote becomes $9,400 bill

• VAT cut ‘could not be more perfectly timed’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamas Federation of Retailers co-chair yesterday reiterated that the Christmas shopping season will be “make or break” for many merchants, adding: “We’re just rolling with the punches.”

Tara Morley told Tribune Business that apart from COVID-19’s continued impact on consumer spending and confidence, the greatest challenge facing the retail sector as the festive season are the “gaps” on many shelves due to inventory/product shortages caused by the global supply chain crisis.

Describing delivery times and freight costs as “all over the place”, with the impact varying between different merchants depending on the goods they sell and suppliers sourced from, she added that a successful Christmas shopping season is critical to enabling Bahamian retailers to “get back on their feet” following a trying 21 months of dealing with the pandemic’s fall-out.

Despite some sectors, such as interior design, being told furniture which would normally take three months to deliver is now six months out, Ms Morley said most retailers she had spoken to had confirmed festive staffing levels will be the same as 2019 in order to meet anticipated demand.

And, with The Bahamas exposed to rising inflation due to its status as “a price taker”, the Federation co-chair said the Government’s planned 10 percent VAT rate cut - targeted to take effect from January 2022 - “could not be more perfectly timed”. And she also hailed the curfew’s end for enabling all retailers to return to normal opening hours.

Urging merchants to stay in close contact with their customers, and make maximum use of social media to let them know when sought-after Christmas goods have arrived, Ms Morley said retailers were also referring clients to other stores if they did not have the requested item to ensure the spend remains within the Bahamian economy.

“Try and keep it local as much as possible,” she advised Bahamian shoppers, “because it’s going to be a really critical season for all the retailers to get back on their feet. Typically, Christmas can represent up to 50 percent of your business as a retailer.

“If they miss this Christmas, given all the pressure put on them last year, you’ll see a big difference in making or breaking a lot of businesses. That said, I think everyone is being super-optimistic. We’re just praying for a return to normal. We’re seeing an uptick in tourists coming back into downtown stores, and hotels full, which everybody is thankful for.

“I would say everyone is excited to be back to full hours, and hopefully we will have a very productive Christmas season. The biggest hurdle is going back to this supply chain crisis we’re experiencing. You walk into every shop, and you are going to notice some gaps in their assortment,” Ms Morley said.

“Everyone is just doing the best that they can, and I think people have been patronising one another. If you don’t find it in our shop, try this store that got their shipment in. Try and keep it in the economy. Everyone’s trying to send customers to each other so The Bahamas benefits.”

The inflationary impact from the global supply chain crisis was also highlighted yesterday by Rick Lowe, Nassau Motor Company’s (NMC) operations manager/director. He revealed that a shipment of motor oil, initially quoted at $3,200 for freight, turned into a $9,400 actual bill when it arrived in The Bahamas.

“It’s just astronomical,” he said of the near-tripling in cost. “It’s happening to everybody, I understand, not just to us. You have to pay VAT and duty on that. The end result is that the consumer pays more. Our costs have skyrocketed. Everybody is being impacted in the same way.”

Ms Morley, meanwhile, said all retailers were having “their own delays” as a result of the supply chain backlog, with the length of delivery hold-ups determined by multiple factors including the goods and suppliers involved; where the inventory was being shipped from; and the ports and carriers involved.

“At this point it’s just keeping up with the inventory and supply chain stress,” she told Tribune Business. “Just to give you an example, I’ve noticed with Christmas decor, which is hyper seasonal, some people have received their goods and others were subject to delays and are just getting inventory into their stores.”

As a result, and with COVID making it even more important for The Bahamas to retain every dollar spent this Christmas that it possibly can, the Federation co-chair urged shoppers to keep “an open mind” and be patient if the goods they want have yet to reach store shelves.

“It’s incredibly important with this Christmas, especially given the past two years that we’ve all been going through together, that the extent to which we keep all the money in the economy and circulate in the economy is going to go a long way to more jobs back in the market and help everyone get back to some sort of normalcy,” Ms Morley said.

“Everybody I’ve spoken to plans on going back to normal on staffing for Christmas. They’ve looked at what they did in 2019, and that’s their plan for this year. That’s everybody’s plan, and everybody is patiently working through their delays with goods.”

With inflation becoming a growing threat, Ms Morley said there was little that The Bahamas can do to counter this because it imports virtually everything it consumes. “The Bahamas is very much a price taker,” she agreed. “I can say across all our businesses we’ve seen some price increases depending on the category but other categories remain flat.

“It’s a mixed bag, and due to inflation’s impact on costs the reduction in VAT for January couldn’t be more perfectly timed to help to offset some of the increase.” Ms Morley operates three retail formats, Cole’s of Nassau, Morley for Men and Maison Decor, and across their various clothing, gift and furniture inventory some price rises have been seen.

“It’s not just the inflation on the goods themselves but the shipping to get them here,” she added. “If that goes up, it goes into the cost of goods sold. It’s all over the place. I’m seeing some rates that are astronomical, some that are the same as before. It doesn’t seem to have a whole lot of rhyme and reason, and we’re just rolling with the punches.”

Ms Morley said some products she ordered, which would normally take two weeks to arrive in The Bahamas, had only reached after six months. And interior designers have been told that what is usually a three-month ordering cycle will now take two years.

Comments

John 5 days, 14 hours ago

The watchword is ‘CAUTION”, both to consumers and merchants alike. First with the fourth wave of Covid sweeping Europe and parts of America, some countries and states are going into lockdowns and curfews again and others are closing their borders to the outside world again. Some don’t expect the fourth wave to last as long as the Delta wave but some slowing of the economy is expected. Secondly, there is a shortage of many items. Some holiday and seasonal and others essential. Consumers should learn to maneuver around these shortages and not be duped into paying astronomical and outrageous prices for items, especially gifts. The shortage is only temporary and the gifts can be substituted with other, more affordable items. And consumers and merchants should be cautious on stocking up on inventory and supplies whilst freight costs are high and driving up the costs of duty, vat and the retail price of the items. Increased prices mean less sales and if the items do not sell before freight costs go back down, then the retailer who still has inventory and the consumers who stocked up will lose. The freight companies and Customs will benefit from the surplus revenue.

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