Get ready for price increases end of the year

All the Reps are at the High Point Market and they go into a lot of meetings with the executive staff. I have heard from a couple (in different furniture companies) that the raw material pipeline costs are stressing the furniture makers so badly they will have no choice but to raise prices around year's end. Shipping costs have gone up fourfold, lumber costs have risen, the supply chain increases are putting a lot of pressure on margins.

While this is rumor at this point - what affects one affects all. It's a good time to plan your purchases now and put your orders in on things the next two months. I have no idea of what these increases will be, probably on the order of 5 % to 9 % however.

Hooker Furniture just put a 2.5% increase on all their pieces last week due to transport cost increases, so its definitely coming. That didn't even include the cost of materials to produce the goods, that was strictly a container ship fee.

You heard it here, first!

Hancock and Moore has told me they will definitely be having price increases in January of the coming year. I do not know how much percentage, but it will be across the board as raw material costs and transportation expenses are soaring.

In a strange twist, I got a phone call from my H&M Rep today, they are ending Market Specials this coming Saturday, the 31st of October. The Market Specials allow dealers to buy floor stock at a discount over regular wholesale, so we have a little room to mark down floor models. Market just ended last week, and these Specials usually run to the end of the year (Dec 31st). Now they are going to end after just 10 days. What this tells me is either:

1) They don't need the business as they are running full out on production currently to meet order demand or more likely,

2) Cost of materials has gone up so significantly they cannot absorb the discounts of the Market Specials.

I can't help but wonder what kind of price increase will arrive in January. Anyone's guess of course.

Hancock and Moore's Price increase will not be in January, it will go into effect Feb 15th, 2021 and be modest, around 2.5%. February is generally when they have a 5% off sale period, so its odd they would have a price increase in the middle of a sale period. My suspicion is they will not do the sale period like they have in the past. They are literally buried with orders as are all
furniture producers and supply chain issues are increasing, not decreasing, due to Covid.

Hancock and Moore will also change the Town and Country Program at that time, it will have increases and most likely be condensed down, it has too many items in it right now and too many leathers, resulting in cover out-of-stocks which was never the intent of the program. A new program catalog will arrive with the changes in February.

The High Point Market has also been moved to June (instead of April) which is a smart decision. More Covid vaccines will have been out and available by then, and also the companies don't really need the distractions of building new showroom pieces since they are trying hard to get out of being buried with normal orders.