Why are so many items out of stock and taking longer to get?
When we built Great American in 2004, one of our founding principles was having the largest selection in the area of in stock merchandise that was ready to be picked up or delivered.
That remains the same today. However, the disruption to the global supply chain brought on by the COVID-19 pandemic and the surge in customer demand after initial lockdowns lifted has left most retailers, including Great American, low on in-stock merchandise without ready replenishment. In addition, furniture manufacturers across the country have experienced labor shortages, additional shutdowns, high demand, and difficulty in acquiring raw materials for furniture production.
Our management and Merchandising teams at Great American are hard at work on finding sources of inventory with faster turn around times so that we can continue to offer the same level of availability the Mid-South community has come to rely on us for.
In the meantime, we are grateful for your patience as we experience longer than normal delays with items arriving in our warehouses and lower stock levels on our everyday items.
Want to know more about why this is all happening in the industry?
TL;DR: Between a surge in consumer demand, raw material and labor shortages, furniture and mattress manufacturers have been unable to keep up with consumer orders, creating a shortage of furniture and mattress products and long wait times for item availability.
Increased consumer demand created early on in the pandemic and sustained well into 2021, has caused dealers to place a tremendous amount of orders, causing shortages of product from manufacturers and raw materials from suppliers.
Every manufacturer had to reforecast numbers to suppliers without a clear end to the shutdown. The forecast was a U-shaped recovery with a rebound in Q4. This turned out not to be the case.
Around May 15th, a major surge in demand in the furniture industry began. The U-shaped recovery predicted turned out to be a V-shaped recovery. Manufacturers were not prepared for the resurgence of demand.
This created a shortage of raw materials that manufacturers have still not been able to recover from.
Non-woven polypropylene was one of the largest raw material shortages initially. This material is found in mattress foundations, sofas, loveseats, recliners, ottomans, lift chairs, and more. It's extremely durable and passes the flame retardancy test required by the US government for mattress material.
N95 masks, gowns, and many non-medical masks are all made of non-woven polypropylene. Because the medical industry has been producing PPE (personal protective equipment) to combat COVID-19 at record levels, they have the market cornered on this material, making it more difficult for furniture manufacturers to secure.
Lumber has been another raw material shortage. Half-inch and three-quarter-inch high strength plywood is used to manufacturer mattress foundations, and in the framework for all the upholstery items mentioned above. Between the surge in new home construction of and damage caused by natural disasters such as hurricanes in 2020 and 2021, those sizes of plywood are in very short supply.
Foam, TDI chemical is used to make polyurethane is found offshore in Louisiana and continues to be a major shortage. Most of these offshore sites were wiped out by hurricanes.
A labor shortage has also contributed to the issue. The CARES act supplementing worker's income enhanced unemployment benefits, making it difficult for manufacturers to get employees to come back to work after the shutdowns. The need to socially distance and the issues of the COVID-19 virus complicates the manufacturing process. It typically takes 7-9 people to make a sofa, but due to COVID-19 protocols, this gets cut down to 3. This makes producing the products take longer. Plus, if a factory employee tests positive for COVID-19, the factory must shut down for disinfection before work can resume. Many manufacturers have found it impossible to keep their commitments in the original time frames they promised due to these constantly evolving conditions.
Products and materials used to make domestic products that are sourced from overseas have become caught in a logistics slog due to nationwide shutdowns in overseas countries, labor shortages in factories, lack of availability of shipping containers, skyrocketing container pricing, bogdowns in unloading ports like Los Angeles, and increased freight costs and limited truck driver availability. All of this has created a perfect storm that is leading to increasing delays on goods as the situation worsens.
Domestic inventory has become very difficult to find, and manufacturers, which were initially able to absorb those costs, have now become unable to sustain the increases and are passing on the additional costs created by this situation to the retailers. All manufacturers are well into to multiple rounds of price increases, causing furniture and mattress prices to see triple-digit, and in some extreme cases, four-digit price increases across the country.
Great American has always prided itself on its ability to source merchandise so it can be available quickly to you, our Memphis community. While, like you, we find these challenges frustrating, we are committed to doing our best to work with manufacturers that can provide inventory as quickly as possible and are among the best in the industry at keeping their commitments to their customers.
Updated on: 11/05/2021