A month ago I wrote about answers I was hoping to gather at pre-market. Business at pre-market was robust with most factories attending reporting enthusiasm from their top accounts. Many retailers took it as a chance to see how the supply chain was reacting and strengthening their relations with key manufacturers. Many looked at new products politely but wanted to know when their on order products would be shipping.
Here we are with another market 5 weeks from the last market with many of the same concerns as to when the supply chain will start functioning properly. Raw material inflation is still rampant. Foam allocation is easing but still in effect. Container freight rates are still astronomical with west coast ports backlogged for weeks. Freight costs are higher for trucking as truckers are scarce to haul products across the country. Walmart, Amazon and other big players are bidding up the available transportation sources leaving less for other retailers.
Finally, factories have had a real challenge finding workers due to enhanced federal unemployment benefits combined with regular unemployment benefits that pay more than a factory worker’s wage if they work. Some states are beginning to not accept the federal $300 a week stipulation which may lead to workers returning to the workforce sooner than the September 6 federal date. How much will that help ease the production of furniture is anyone’s guess, but I know a few factory owners and port authorities that would love to have the pool of workers increase.
But here is the good news. People are starting to get out and spend money. As I sit in airports over the past month they are as crowded as the times pre-pandemic. Airplanes are full albeit with masked people. Our city mask mandate just expired and the local store owners and businesses seem to be fine with it. People by and large have better attitudes with comfort of vaccines and government stimulus. Positive attitudes and money in pockets always seem to be good for big ticket purchases.
As for our industry, backlogs will keep many upholstery factories going for a while and other categories seem to also have lots of back orders. Housing has incredible demand that does not look to be subsiding around the country which bodes well for our industry. It looks like a great wave to continually ride.
We as an industry have gone from a just in time model to buying based on forward projections. Back when my dad was getting his career started in this industry in the 1960’s everything was on cutting cycles and prices were inflating not deflating. It appears we are Back to the Future.
As for reps, I am getting more and more notices from chain retailers inviting us back into the showrooms and allowing us back into corporate offices. We are getting to what used to be normal personal interactions with one caveat. The efficiencies of virtual meetings will continue and be intertwined with these personal meetings.
Our trade association IHFRA is doing a wonderful job of educating reps with ongoing education on the new opportunities and ways of doing business. They also have developed over the past year several new benefits including health insurance. If you are in High Point next week, be sure to stop by the IHFRA office and see what’s new. They are doing a great job for the entire industry.
Have a great market. Be sure and say Hi if you see me. I’ll be the guy on the street without a mask!