Supply chain disruptions amid the pandemic have pushed up the prices of some expensive consumer products.
Last month, people paid more for vehicles and appliances than in June 2020, according to a Statistics Canada monthly report on the Consumer Price Index (CPI).
With bottlenecks continuing to cause arrears, there are no immediate signs of improvement. This is bad news for the people in the market who buy the products.
“The refrigerator is still working, but the freezer is no longer there, so no ice. No ice cubes, ”said Kathy Soke.
Soke’s freezer stopped working three weeks ago, prompting her to order a brand new refrigerator.
When she did, she expected it to take months to happen.
“I was prepared to wait until about October,” she said.
Supply chain disruptions caused by COVID-19 are making it harder to get most home appliances, according to Curtis Penner, managing director of Coast Appliances in Winnipeg.
“And we don’t expect them to improve for at least a year,” said Penner.
He said it had an impact on every brand they sold, from refrigerators and freezers to ranges and stoves. The delays have been exacerbated by people spending more on their homes during the pandemic.
“With the high demand, then the shortages, the supply chain issues – it just created chaos,” Penner said.
According to the latest CPI post, production bottlenecks, input shortages, higher shipping costs and delivery delays have pushed up prices.
It’s a situation Barry Prentice, professor of supply chain management at the University of Manitoba’s Asper School of Business, expects to improve, but not until Christmas.
“What we’ve seen is a real shortage of computer chips,” Prentice said. “I think it’s partly because we’ve had an increase in demand for them, but also because there have been production issues,” he added. “The automotive industry has been affected by this, but also household appliances. “
In June, vehicle prices jumped 4.1% from the same month last year, while home appliances rose 5.2%, according to the CPI. Cooking appliances rose 6.3%, laundry and dishwashing appliances 7.1%, and refrigerators and freezers 9.8%.
“And again, all of these costs are fed back into the supply chain and must be covered by the consumer ultimately,” said Prentice.
Some stores said they bought more warehouse space so they could order more inventory sooner, others said they offered loaner devices.
While this can help with inventory, it hurts the bottom line.
“Anything related to disruption tends to drive up the costs of doing business and will ultimately trickle down to prices,” said Paul Larson, another professor of supply management at the Asper School of Business at the University of Canada. Manitoba.
He said some manufacturers are feeling the impact from both sides.
“On the customer side or on the demand side, there have been disruptions, of course, there have also been supply disruptions,” Larson said. “There were even internal disruptions in terms of the labor shortage. There is a lot of disruption.
Larson said they would find ways to get things through the supply chain, but noted that some customers could be taken off the market price.
Penner said manufacturers and retailers have so far absorbed the increases in products in his store, but he doesn’t think it’s going to stay that way.
“In the near future and possibly in the New Year, you’ll see that this will spill over to the consumer as well,” Penner said.
He said the best thing to do is order early. For Soke, it wasn’t an option, it was an emergency replacement. But to his delight, a new refrigerator will be delivered on Saturday.
“I am stunned,” she said. “I am really excited. I feel so lucky.”