Soaring Chinese housewares costs passed on to retailers

Housewares retailers are bracing themselves for a price hike in products made in China.

Suppliers have been writing to their customers warning them that they cannot continue to absorb the escalating cost of goods from the Far East and have no alternative but to pass it on.

But Cookshop and Housewares Association chairman Caroline Gordon told that retailers should not hesitate to pass the additional costs onto consumers in turn.

Factors pushing up prices in China include rising labour costs and the soaring price of steel and freight: shipping prices have increased 40% in the last six months. The Chinese government has also reduced tax incentives for its exporters by 8%, an additional cost being picked up by UK importers.

In a letter to customers, one of those affected, Premier Housewares, says that over the last 18 months it has mainly absorbed the price rises “on the basis that we may be able to negotiate reductions in coming months if costs in China stabilized. This however has not been the case and going forward the situation is appearing to deteriorate with no sign of any improvement.”

The company says it will be raising its prices on individual ranges in line with the rise in cost to itself, although other suppliers are said to be applying an increase across their entire ranges.

“Where the price increase may be as high as over 50% we may be left with no alternative but to discontinue the line completely,” says Premier.

George East Housewares is another importer affected by the rising costs. It says it too has been absorbing increased costs for the past 18 months but will now have to add 10% to the price of most of the products it sources in the Far East.

GEH has also been hit by rising prices on woodware from Poland, driven by higher labour costs, a shortage of timber and growing demand from other countries. The company says it will be raising its woodware prices in turn by 15%.

Caroline Gordon said she would advise cookshops and other housewares retailers “to put prices up most definitely because it is a big hike. We have to pass it straight onto the customers because costs have gone up so much – rent and rates – and way more than inflation. We shouldn’t be scared by customers saying, how much? WMF put their prices up hugely in March or April, some bits were nearly double; we say to customers, that is the price and nobody bats an eyelid.”

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