Most Store Owners Passed Along Costs to Save Margins
Over 88 percent of gift shop owners reported that price increases ate into margins this past holiday season, yet many retailers were quick to pass along as many of those increases as they could.
“Across the board, vendors increased prices and we increased, and continue to increase prices, to avoid low margins,” says a Kansas store owner.
“It began eating into the margins, but we realized early we had to share this with the consumer,” says a South Carolina shop owner while a Florida retailer reports, “We passed on some and took a hit on others - it depended on what our customers were willing to pay. We managed to hold our margins flat to last year.”
A Wisconsin retailer shares, “We aim for 55 to 60 percent margin on most items, but because of surcharges and price increases, we did not get that this year. We had a little buffer room built into our retail prices, so the customers didn’t feel the difference.”
In Oregon, a determined shop owner “spent hours and hours going through POs and increasing prices to reflect the freight surcharges.”
“We tried to increase our prices as we went through the season and no one really seemed to notice or comment,” says a retailer from New York. “Meaning we could have been doing the bigger margin all along?”
While the increased freight surcharges were to be expected, some store owners were irritated by the way in which the increases were applied. “Most were minor increases that were easy to work around,” says a Rhode Island store owner. But “It was an irritation when companies added a surcharge without informing us. Most that did this, we will not deal with again.”
A retailer in New York was also “upset to automatically see surcharges without the chance to say if we accept or not.”