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The Retail Council of Canada (RCC) is warning that COVID-19-related interruptions in Vietnamese furniture companies, combined with high import duties, could result in furniture shortages in Canada.
The southern region of Vietnam recently had a two-week lockdown due to COVID-19 cases increasing, causing furniture manufacturers to shut down their factories and delay already-late shipments to Canadian retailers.
Diane Brisebois, CEO of the RCC, told CTVNews.ca that global supply chains continue to be disrupted by the pandemic, draining domestic surplus and hindering what products can be acquired from overseas. “This is obviously going to create an enormous amount of pressure and a shortage of goods if in fact the factories remain closed for an extended period of time,” Brisebois said in a telephone interview in July of 2021.
She states that many cases certain furniture in high demand in Canada, are not the ones being produced in Canada. Now causing a shortage of inventory, huge provisional tariffs, and the cost of furniture increasing as a result. It’s noted the new tariffs are as high as 295% from products in China, and 101% from products in Vietnam.
“Our concern is that, especially the small and mid-sized furniture retailers, they can’t absorb those increases, and through that they may be faced with reduced sales,” Brisebois said.
Due to COVID-19 outbreaks and restrictions, furniture producers in Vietnam are only creating a limited amount of inventory, according to Brisebois. As a result, manufacturers in Vietnam will likely sell their items to nations with lower import taxes than Canada.
According to Brisebois, this will make it more difficult for Canadian merchants to provide a diverse range of products at a number of pricing points, causing more Canadians to look to the United States for furniture.
“The issues and challenges for our retailers still exist and now with the resurgence of cases and different markets around the world it’s even making it worse,” Brisebois said.
Neustaeter, B. (2021, July 29). ‘A recipe for disaster’: Retail council warns of furniture shortages amid factory outbreaks, tariffs. CTVNews. https://www.ctvnews.ca/business/a-recipe-for-disaster-retail-council-warns-of-furniture-shortages-amid-factory-outbreaks-tariffs-1.5528125.
Toneguzzi, M. (2021, June 8). ‘Devastating situation’ for furniture retailers in Canada amid ongoing federal GOVERNMENT tariffs: Interviews. Retail Insider. https://retail-insider.com/retail-insider/2021/06/devastating-situation-for-furniture-retailers-in-canada-amid-ongoing-federal-government-tariffs-interviews/.