The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Federation of Retailers’ co-chair yesterday said larger merchants are reporting an “easing” of supply chain disruption with various surcharges previously applied to shipping costs “starting to get removed”.

Tara Morley told Tribune Business that the logistics and cost pressures were starting to lessen despite continued global economic uncertainty, with much of global inflation already priced into product orders already placed.

However, she revealed that the outlook for the key upcoming Christmas retail season, when merchants make up to 40 percent of their annual sales during a period that can make or break their year, remains “mixed” with much still depending on whether pent-up demand continues to drive Bahamian tourism amid fears of a recession in the country’s major market, the US.

“Some of our bigger retailers have indicated that the supply chain is opening up a bit more again, so they’re seeing less disruption,” Ms Morley told this newspaper. “Inflation has been going on since COVID started, so I feel a lot of those costs have already been reflected, at least through orders put through already.

“It remains to be seen what level of inflation we end up with because we’re heading into the cooler months up north, so what that’s going to do to oil and gas markets, and what that does to us because we’re a price taker, is unknown.”

With COVID lockdowns in China continuing to hamper manufacturing and shipping, Ms Morley said of the outlook for Christmas: “It’s definitely mixed. Some people have taken a more conservative base line versus last year, and some people are expecting it to be the first fully back to normal Christmas since the pandemic.

“It depends on who you speak to. I spoke to one of the retailers who said they were expecting more of an impact with what’s going on in the economy, but for whatever reason people see their product as an essential part of their lives so they are buying a full inventory for the upcoming season. Others are taking a more conservative approach.

“Anything could happen, but it seems as if everything is easier than last year supply chain wise. There’s little pockets of flare ups depending on the product. Additional cost surcharges and fuel charges added for shipping, a lot of that stuff is being removed. Some of that is coming off, which is price beneficial, because containers are more available. Again, not perfect, but not as backlogged as before.”

The Central Bank previously revealed that annual inflation for the year to June 2022 increased almost five-fold compared to the previous 12 months to give a stark indication of the cost of living crisis facing many Bahamian families.

The monetary policy regulator, unveiling its July economic update, revealed that the annual domestic inflation rate had increased to 4.4 percent as opposed to 0.9 percent some 12 months ago just one day after the Prime Minister urged Bahamians to be frugal with their spending and warned that the country was “in for a rough ride”.

“Reflective of the pass-through effects of the increase in global oil prices and supply chain shortages, domestic consumer price inflation - as measured by the All-Bahamas Retail Price Index - rose to 4.4 percent during the 12 months to June, from 0.9 percent in the same period of 2021,” the Central Bank said.

“Leading this outturn, average costs for transport rose by 14.2 percent; for communications by 12.2 percent; for education by 2.3 percent; and for recreation and culture by 1.3 percent after posting respective reductions in the prior year. Further, average inflation accelerated for food and non-alcoholic beverages (7 percent); restaurants and hotels (6.8 percent); clothing and footwear (5.4 percent); health (4.8 percent); and furnishings, household equipment and maintenance (2.1 percent).

“Similarly, the rise in average costs quickened for alcoholic beverages, tobacco and narcotics and housing, water, gas, electricity and other fuels, by 2.8 percent each. Providing some offset, the average cost for miscellaneous goods and services decreased by 1.8 percent following a gain of 2.7 percent in 2021.”