In the latest sign of post-pandemic disorder in the American economy, even companies that have built national supply chains are facing extreme shortages of goods and labor.
Furniture chain Room & Board Inc. purchases more than 90% of its products within the US, and its closest supplier is located about 4 miles from its Minneapolis headquarters, in contrast to many of its competitors, whose Supply chains can be traced back to factories in China.
But amid huge consumer demand and a shortage of labor and many materials, some Room & Board customers are waiting months for sofas and dressers. About half of the items you sell are in stock right now, compared to the normal 90%. The company emailed a proactive apology to customers earlier this year, noting that many purchases would likely be delayed.
“We are not reaching where we ultimately want to be,” said Bruce Champeau, President of Room & Board.
Robert Arbaugh bought a kitchen table, four chairs, and a sofa from Room & Board last year after moving into a condo in Philadelphia. His furniture was supposed to arrive in a month. Instead, six were needed, spread over five installments.
“I had nothing to sit on,” said Arbaugh, who works for a pharmaceutical company. It said it was considering canceling the order, but other retailers were reporting similar delays. The last piece, a brown leather accent chair, arrived last month.
It is a difficult time to buy a sofa. Manufacturing and shipping delays have delayed delivery times across the industry for months. That has put a limit on the ability of many manufacturers to capitalize on demand. IKEA is missing some furniture in certain US stores, and a Design Within Reach promotion offers discounts on purchases of in-stock items. Some furniture buyers have expressed frustration with long waits in line.
Like many businesses, Room & Board and its suppliers largely closed last March when the pandemic hit the U.S. The retailer was soon inundated with orders as stay-at-home people upgraded rooms. living and buying new outdoor dining sets.
The demand has not diminished. Consumer spending on furniture and appliances in the first quarter of this year remains nearly 30% above that period in 2019, before the pandemic began, according to federal data.
Room & Board expects sales of $ 650 million this year at its 19 stores, up from around $ 500 million in 2020. The company estimates that revenue would have reached $ 700 million this year if its supply chain weren’t so messy.
A nearby supplier, Minneapolis-based Bell Manufacturing and Services Inc., has grown its workforce by about a fifth to 135, but demand for its metal tables and shelves has more than doubled. Orders can take up to 20 weeks to ship, compared to five weeks before the pandemic.
“Our open orders are way beyond what we can actually produce right now,” said Judy Bell, vice president of Bell.
Another Room & Board supplier, Duluth, Minnesota-based Loll Designs, is changing production schedules based on the polyethylene colors it receives into Adirondack chairs. Winter storms in Texas earlier this year disrupted the production of many of these petroleum products.
A supplier told Loll Designs in May that the resin it needed to make red polyethylene would arrive one day late. That quickly leaked into production delays at Loll Designs and potential shipping delays for Room & Board customers. The retailer says it won’t ship a bright blue Loll chair until November.
“It’s been word of mouth quite regularly,” said Nate Heydt, who leads business development at Loll.
Room & Board has added new domestic manufacturers to its production network to alleviate delays and is looking for more. He has also urged suppliers to expand capacity, telling them that he expects demand for home furnishings to remain strong even as people return to offices, restaurants and hotels.
Gene Wilson, the company’s chief marketing officer, flew to Grand Forks, North Dakota, in February to convince Wood-Products Inc., a maker of wooden sideboards, cabinets, and other furniture, to add machinery and a second turn.
“They are at the point where they will hit a capacity ceiling shortly,” Wilson said.
Wood-Products CEO Mark Cutshaw decided to invest in increased production. The company added a second shift in which workers apply stain to furniture. Wood-Products also hired its first hiring manager, added some perks, and raised starting wages to about $ 15 an hour.
Food trucks were brought in on Thursdays to spice up the lunch options for the workers. One recent week, the Bratwurst Kings truck made potato bites topped with meat and cheese, a dish it calls “redneck nachos.”
Wood-Products also got Room & Board to agree to increase the wholesale prices it pays for Wood-Products furniture, in part to account for record wood prices. Room & Board said it would not change prices from those listed in its catalog.
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Other retailers and manufacturers have brought supply chains to the US from abroad in recent years, with the goal of streamlining their operations and attracting customers with a commitment to supporting domestic jobs. More companies did so during the pandemic, as travel restrictions and export embargoes bogged down global trade. Some barriers to international trade are increasing as Covid-19 cases rise in manufacturing powerhouses in Asia.
Despite recent challenges, Mr. Champeau of Room & Board said he believes that acquiring all of the company’s furniture in the US is a better strategy over time.
“We can control quality much more effectively,” he said. “We can offer more options and custom options.”
Write to Austen Hufford at [email protected]
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