Canadian retailer Lee Valley Tools has a grim warning for anyone looking to get their hands on some high-end garden shears, brass badges or crokinole planks anytime soon: good luck.
The Ottawa home and garden chain with 20 stores across Canada told customers in an email this week that it was sending its Christmas catalog “uncomfortable ahead” this year because it was anticipating significant delays in bringing its products to market.
âThe message to consumers is to buy early because there is no chance of ordering or restocking [before Christmas]”CEO Robin Lee said in an interview with CBC News. He said the company’s inventory now consists of products it ordered a year ago.
Lee Valley is just the latest company to warn of the massive problems it faces in getting its products from suppliers and manufacturers to shelves – a complicated process known as the supply chain.
The COVID-19 pandemic upset usual trends in supply and demand by eliminating both in early 2020, as factories were closing to keep workers safe, and consumers were not anyway. in the mood to buy something other than the essentials.
But now that things are slowly returning to some sort of normalcy, vendors can’t scale up fast enough to meet the booming demand for everything from cars and home appliances to game consoles and even iPhones.
Shipping costs are a major factor, with the cost of shipping containers from Asia to the west coast of North America having more than quadrupled this year, a logistics company recently told CBC News in an interview. .
Labor shortage, fuel costs blamed
Lee Valley CEO says labor shortages and higher fuel costs are driving up prices.
“There is a lot of [shipping] containers there, but the cost of moving them has increased. In some cases, orders of magnitude. We used to pay around $ 7,000 to bring a container from Asia, and the cost today is $ 34,000, âsaid Lee.
Lee Valley says consumers shouldn’t expect to receive some items until next Christmas, let alone this one.
Lee pointed to one of his company’s strawberries. Normally, this part would take four months to arrive from a company in Taiwan where he has been ordering for years. He placed an order last week and said the expected delivery date is May 2022.
“A lot can happen by then. And if we get just a little more demand, we could be out of stock for over a year on this product.”
He estimates that problems with the supply chain may continue for another 12 to 18 months, but warns it’s hard to say.
âConsumers need to understand that even when COVID is over, it is not over,â Lee said. “This ripple effect is going to continue for a very, very long time.”
Ikea is also reporting issues
Small businesses like Lee Valley have been wiped out, but even the big fish are in trouble. Swedish furniture retailer Ikea says it also can’t keep its shelves fully stocked just yet.
Company CEO Jon Abrahamsson said the biggest challenge was getting goods out of China, where about a quarter of Ikea products are made. As a result, he expects consumers to face difficulties until 2022.
Most of the chain’s products in Europe are also made there, but more of what is sold in North America comes from Asia, so the supply crunch is being felt the hardest in Canada. and the United States.
âOn the retail side, we’ve learned agility like never before because every day you have to work with what you have,â Abrahamsson said. âYou have to find ways to solve customer needs with limits we’ve never seen before. “