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szdaily -> World Economy -> 
Soaring costs challenge Canadian retailers
    2021-06-23  08:53    Shenzhen Daily

CANADIAN retailers are readying for a post-pandemic rebound as consumers emerge from lockdowns and open their wallets, but higher costs are eroding their profit margins and fanning inflationary pressures.

Skyrocketing transport and input costs — fueled by a global shipping container shortage and surging demand for raw materials — mean prices set a few months ago no longer make sense, especially when demand for goods is so high that certain products are selling out before they even arrive.

Many retailers and importers are sacrificing margins to try to weather what they hope is a temporary imbalance as the world snaps back from the pandemic. But some are also increasing their prices and that is helping feed Canada’s hottest inflation in a decade in May.

While the Bank of Canada said the current period of high inflation is transitory, it warned this month that if supply imbalances persist, inflation might lead it to reduce stimulus more quickly than expected.

For furniture importer Rachel Bourdages, the cost of getting shipments from India and China to Canada has quadrupled amid the shipping container shortage.

It’s not just small businesses feeling the pinch. Retailers like Canadian Tire and parka maker Canada Goose noted the cost impact of the global crunch in recent investor calls. And consumer prices for everything from clothing and shoes to furniture and cars have jumped on the year.

Still, retail sales are expected to boom this summer and were already tracking about 5 percent higher in early June, according the RBC COVID Consumer Spending Tracker.(SD-Agencies)

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