Published May 02, 2022 --
The great news for American retailing is that shopping is back. Consumers have an abundance of discretionary funds from savings and government assistance and are now spending cash and running up credit card debt according to national retail sales reports. Chain stores are finding a need to upgrade their environments and there is a significant uptick in independent new store openings.
The not-so-great news is that simply put, China is a mess, and no one knows when factory production, labor markets and the ports will resume normal operations. Companies that have containers shipping from China can expect more delays. Apparel and hard goods factories located in the Shanghai area have been the most vulnerable due to government’s forced lock-down of the population.
Furthermore, frustrated Shanghai residents have taken to social media to vent their anger at local authorities over difficulties sourcing food, lost income, separated families and poor conditions at central quarantine centers. Tensions have on occasion erupted into public protests or scuffles with police. The Chinese economy and global supply chains are also feeling pinched by shuttered factories and transport bottlenecks in many parts of China hit by COVID-19 curbs. (Fortunately, Econoco’s primary factories are located in the south and not subject to most restrictions).
Econoco’s factory partners continue to operate at peak production. Our Pennsylvania distribution center is bursting with its inventories at an all-time high. The company, now in its 97 year, continues to replenish its stock fixture products at a brisk pace. Wholesale and retail customers are already booking orders now to ensure on-time deliveries during upcoming selling season.
The ports of Los Angeles and Long Beach continue to experience delays. Further disruptions are expected as port workers’ union contract comes to an end on June 30. Again, Econoco is fortunate to avoid these delays by bringing in their inventories directly through the Panama Canal and up the east coast of the U.S.
While ocean freight rates may have hit their peak, industry experts widely suggest that raw material and labor cost increases from overseas markets are expected in the coming months.
Econoco is taking an aggressive approach to its pricing policies by postponing current profitability in favor of long term reliability. With rampant inflation in the U.S. and the war in Ukraine affecting many markets, Econoco pledges to make its products both available and affordable. We will continue to offer our chain store clients both domestic and offshore options for fixture and display programs. Inventories will remain the largest in the U.S. and our engineering and design team expect to continue our flow of new product innovations.
Our hope is that we continue our journey forward in these uncertain times.