Singapore
Local furniture retailers are finding it harder to shelve price increases as ongoing supply and transport disruptions continue to push up costs “exponentially”.
Freight rates, for instance, have seen a near 10-fold increase on the back of a persistent shortage in shipping containers and port disruptions amid the COVID-19 pandemic. Supply constraints also bumped up the costs of raw materials, particularly metal which saw prices rise as much as 60 per cent last year, they told CNA.
After absorbing these cost surges for more than a year, homegrown furniture label Commune said it has “come to the level where it is no longer able” to keep doing so.
“We don’t have the margins to stomach (the rising costs) so we are going to increase prices very soon,” said chief executive officer Joshua Koh.
HipVan, another local furniture retailer, has seen a 10 to 15 per cent jump in costs and has also been holding out on passing on the costs to consumers. But if the supply chain snarls persist, it “may have to revisit prices slightly to help cushion the burden”, chief executive officer Danny Tan said.
“Our customers can be assured that we will do everything we can to keep our prices low, but we’ll also need the continued support of our customers and their kind understanding in situations of supply chain uncertainties,” he added.
These local retailers are not alone.
Swedish furniture giant IKEA has announced a price hike, with the increase at its Singapore stores averaging at about 3 per cent.
This came after the owner and franchisor of the IKEA brand reported a 17 per cent drop in annual profits last year, as the “steep increase” in transport and raw material costs offset record consumer demand.
(Channel News Asia)
