The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian small businesses view the global supply chain crisis as a bigger threat than COVID-19 itself amid growing anxiety over Christmas deliveries, a sector advocate disclosed yesterday.

Mark A Turnquest, the 242 Small Business Association and Resource Centre’s (SBARC) president, told Tribune Business that his members and private clients were increasingly feeling the pinch of delayed and/or incomplete orders where shipments arrived without all the promised product.

With the window for importing, clearing and displaying Christmas inventory narrowing, and the start of holiday shopping just weeks away, he added that micro, small and medium-sized enterprises (MSMEs) were staring at the same “double whammy” of price increases that their larger counterparts face.

“COVID-19 is now not the biggest challenge to small business development,” Mr Turnquest told this newspaper, instead pointing to the supply chain aftershocks inflicted by the pandemic. “Working with small businesses in our mentorship group, and my private clients, I have seen what I call ‘a stop gap’.

“Improvements in productivity and profitability have basically stopped right now. The ‘gap’ means the economic conditions of the country, for my members and clients, many are just holding on. A lot of them are frightened over the shipping challenges we have and delays in delivery. They’d started to see this two to three months ago, but now it has become more problematic.

“If they place an order to buy 15 products, they either get five at a time and/or a major delay on the other ten. They don’t have the money to be tied up in pre-order costs, yet they are having to pay, say, $5,000 in advance to be placed on the delivery list. They’re getting orders piece, piece, and it’s a headache with Christmas approaching.”

Mr Turnquest added that “almost 90 percent” of the retail clients he deals with in his capacity as a small business consultant earn “60 percent” of their annual revenues in the two months between November 1 and December 31, benefiting from both Christmas spending itself and the run-up to the festive period that includes Thanksgiving and the so-called Black Friday sales.

“Retailers in this country make a lot of money over that period; I couldn’t believe it when they showed me the books, but it is what it is,” he said. Labour shortages at US ports and in the ground transportation are being blamed for late deliveries and increasing costs, while the price of shipping containers from China has either doubled or tripled depending on which merchant is speaking.

Manufacturer order backlogs stemming from COVID lockdowns, as well as the post-pandemic demand surge, are other factors in a volatile mix that have all combined to slow down and delay inventory shipments in the lead-up to Christmas.

And, compounding the delays, Mr Turnquest said the same supply chain bottlenecks are also likely to result in price increases that Bahamian merchants will pass on to consumers. “We have to look at the increasing cost of shipping and merchandise,” he added. “Prices will increase.”

Suggesting that this could be felt throughout the whole of 2022, Mr Turnquest said: “If there’s no stability in shipping to bring costs down, costs are going to rise from January to at least June. It’s going to be a double whammy. They can see an increase in prices coming up, and that’s based on shipping.

“This economy is price conscious, and if people cannot buy at ‘x’ they may not buy at all. That means businesses will have to reduce their costs and reduce their profit margins, so it’s going to be a mess.”

Mr Turnquest and SBARC, meanwhile, have written to the Prime Minister seeking a meeting with himself; Chester Cooper, deputy prime minister; and Michael Halkitis, minister of economic affairs, to seek the creation of a National Small Business Plan and passage of a Small Business Act in 2022.

The latter represents legislation that Mr Turnquest has been seeking for more than a decade. SBARC also wants to discuss the creation of a COVID-19 response plan tailored to small businesses, development of a Domestic Investment Framework, and consultation with the sector on laws and policies that impact its development.