The Entertainer’s founder has warned that the rising price of shipping and a shortage of warehouse stuff is likely to feed into less choice and rising prices this Christmas. The effects of supply chain issues from Covid-19 and bad weather to Brexit will be felt in particular in its online warehouses.
Gary Grant, co-founder and chairman of multichannel toyshop The Entertainer, said, speaking on BBC Radio4’s Today programme this morning (1:19), that Covid-19 and typhoons were among the reasons for a container shortage that has meant the price it is quoted for sea shipping from China has risen from $1,500 in early 2020 to nearly $18,000 today. “The cost of shipping has multiplied about 12 times,” he says.
Covid has also meant some UK ports have been closed to cargo at various points in the last year. Once containers arrive in the UK, says Grant, they need to be driven to a warehouse for sorting, picking and dispatching to shops.
He says that its agency staff – who typically help it to cover threefold increases in its warehouse workforce in the run up to Christmas – have often been from eastern Europe. Attracting those staff is set to become more difficult this year. “We’ve been talking all year about the lack of people picking fruit,” says Grant, “but now we’re going to be talking about the lack of people picking boxes. Particularly in the internet warehouses where the volumes in the second half are going to be phenomenal. Because the workforce in our warehouse increases threefold between now and Christmas, it’s just the sheer volume of people.”
That’s now likely to feed through into future price rises and shortages of stock. “You are going to see some inflationary pressures and retailers are working hard to hold those down,” says Grant. “Not all stock is being shipped at the latest container rates. It will take about 18 months for those prices to float through to a significant change at retail, which might be a 10% increase over an 18 month period.
“But shortages – if you went to any toyshop in the country today they’ll be really full of toys, with great ranges, and the same in our own business. But as a business we are over 300 containers behind on shipping than we would be at this moment in time as we enter September. You’l find there won’t be toyshops with empty shelves like supermarkets with empty shelves, but what you will find is the range of toys available will shrink because we just won’t have the variety because there will be so many items that are out of stock.”
The Entertainer is ranked Top150 in RXUK Top500 research.