By Alan Wolf, YSN
It’s the law of supply and demand: Housebound consumers are demanding new home furnishings that are in short supply, and prices are going up accordingly.
Indeed, furniture manufacturers are in the process of raising shipping and product costs by some 4 percent or more, reports Home News Now, an authoritative industry news site. The price increases — which some suppliers are calling “surcharges,” suggesting they’re a stopgap measure — are being implemented to cover container shortages, higher shipping and raw material costs, and other supply-chain issues sparked by the global pandemic and soaring consumer demand.
What’s more, the website said, the price hikes are being imposed on merchandise that’s already been ordered but not yet shipped or invoiced.
“The reality is, we’re getting increases on container freight, on truckload freight, on foam, on OSB [oriented strand board] and other raw materials,” Ashley Furniture CEO Todd Wanek told Clint Engel, Editor-in-Chief of Home News Now. The company had been absorbing the added costs for months, he said, but combined with other increases in the cost of doing business, such as higher wages and retention bonuses to keep workers on the job, “We felt we had no choice but to push this through.”
Ashley’s average 4-percent price hikes will go into effect on most products invoiced or shipped on or after Oct. 18, Wanek announced in a letter to customers. Among other vendors:
- Southern Motion is adding a 5 percent surcharge plus the current tariff surcharge effective Oct. 5;
- Franklin is raising its surcharge from 3 percent to 7 percent effective Sept. 28 to offset the impact of a recent 25 percent tariff on Chinese cut sew kits;
- Mahwah USA began adding a “temporary freight surcharge” of $1,000 to each invoice on Sept. 16, doubling the $500 surcharge that went into effect Sept. 1; and
- Albany Industries will implement a 4 percent surcharge on all U.S.-made goods beginning Oct. 5, regardless of when the order was placed.
In contrast, Klaussner is holding the line on price increases but is no longer accepting new orders due to a “substantial backlog” caused by COVID-related challenges and a tight labor pool.
Ashley’s Wanek added that dealers have been understanding, so far.