Retra members continue to be worried about stock shortages and some are concerned about the impact it could have on this year’s Black Friday and Christmas trading periods.
Covid-19 has caused severe supply issues in the electricals sector, but now that situation has been exacerbated by a shortage of HGV drivers, rising shipping costs for goods imported into the UK, and a global shortage of microchips.
Speaking to Retra magazine Alert, Paul Giles, managing director of Snellings and Gerald Giles, in Norwich, said: “The current product shortages are of great concern and it's making purchasing a nightmare. There have been manufacturing issues, but just when you think a product is arriving, it's then further delayed due to shipping and transportation problems. Some products are taking up to eight to 12 weeks from order to arrive. Many of these are specific built-in appliances, where the customer has no alternative but to wait. Sourcing alternative brands and products to cope with these shortages is proving to be a very time-consuming challenge too.”
Amanda Gray, head of finance at Sound & Vision Electronics, in Frinton-on-Sea, Essex, Alert, told Alert: “The prospect of Black Friday discounting is hideous. We are struggling for stock again – it had improved – but we have backlogs of orders now and empty spaces in our showroom, so how can the industry even consider cutting costs for Black Friday? We should value the stock that’s available.”
She added: “We are concerned going forward with costs rising, stock shortages, delivery issues etc, and think it’s likely to get worse before it improves. These issues will all play a part in the journey of the products from the factory to the dealer and the end user. We have a service department, and we are experiencing price increases with cables and component prices. We can only assume this will affect the manufacture of the electrical items we sell in the showroom. We are busy, but we can’t sell what we can’t get.”
Commenting on Black Friday, Mr Giles said: “I think it will be different this year, with the current product shortages seeming likely to continue, offers are likely to be restricted to a smaller range of products. With recent price increases, it's also likely that savings could be smaller too.”
Despite that, he said he remained optimistic about Black Friday and Christmas trading: “Last year was a far from normal retailing environment – this year, if COVID levels remain under control, I think we will see customers keen to return to our shops and experience products in the flesh, which they couldn’t do last year. I’m sure online sales will continue to perform well, especially over Black Friday; however, I think offers could be more targeted and might run for a shorter period.”
In Tenterden, Kent, Lance Hopley, director of Potters Home Digital, said he was worried about the impact of stock shortages, and that he didn’t see the current situation changing until at least mid-2022, but he remained optimistic: “Yes – there will be an impact, but that’s where, as an independent, we have an advantage. We know our local market and what we can successfully sell, and what doesn’t work. It’s up to us be nimble and thoughtful and react to the situation with a clear forecast on orders and certain product lines and not to generalise across many market segments.”
He advised retailers to maintain close links with their main suppliers to maximise the opportunities available, adding: “As a result, I think the season should be good for independents and I expect, thanks to the recent trend of consumers to shop locally, the independents’ market share should grow year-on-year during this period.”
Look out for a special news report on supply issues in the Autumn edition of Alert magazine – out later this month.