North Bay retailers worry about holiday inventory amid global supply woes

Skyrocketing costs of shipping containers and bottlenecks at ports are boosting pressure on area retailers facing a make it or break it holiday season. Some are ordering goods early and more of them, hoping to have enough product to sell.

“We have actually had to order three times what we normally do for Christmas because we are probably only going to get 25% of it in,” Amber Blanc, owner of the boutique Farmer’s Closet in Fairfield, said.

Financial implications

Blanc said the cost to use shipping containers have gone from $2,500 to $17,000, $3,000 more for an expedited order. For now, her distributors are picking up those costs for now

“The consumer pays for it in some way,” she said.

Hengameh Rafii, owner of The Holiday Shoppe in Sausalito, said it is costing six to seven times what it has is in the past to bring goods to California’s ports.

“They keep on adding surcharges to orders. Some of it I absorb, some I cannot because it is too much,” the Marin County business operator said. She didn’t reveal what increase customers might see.

Asia is the main region where U.S. retailers get their products.

The United States is the largest goods importer in the world, according to the Office of the U.S. Trade Representative. U.S. goods imports totaled $2.5 trillion in 2019. China was the top supplier of goods to the United States, which at $452 billion accounted for 18% of total goods imports.

Sharon Christovich at The FolkArt Gallery in San Rafael said the pandemic has been hard on the shop’s supplying artists.

“Every day I get an email from another one of my suppliers, sometimes two of them, saying we are raising all of our prices because the cost of shipping has gone up so dramatically,” Christovich said. “A lot of our artisans are not working because they lost family members (to COVID). Our goods are all imported from indigenous cultures.”

To keep appearances despite difficult times, she has become creative.

“To have less merchandise, but make it look like we have the same amount is a creative challenge. People have been shopping with us for 30 years, so the product has to change,” Christovich told the Business Journal. “The fourth quarter is definitely critical for us. It’s probably 40% of our business.”

Retailers were hoping to shake off last season when virus fears lead customers to stay home and order online.

Christovich is still offering customers the option to schedule an appointment to shop so they feel as safe as possible.

Rafii, owner of The Holiday Shoppe in Sausalito, which features all things Christmas, is being financially pinched with the lack of international and domestic travel because of pandemic restrictions.

“Most of our customers are tourists except at the holidays when it’s locals,” she said.

Rafii added, “This has been the most difficult time in the 34 years I have had the business.”

She shared how it’s impossible to get some of her hand-painted Christmas ornaments because the woman who paints the glass balls can’t get them from China.

Right now the sentiment for many is getting something from a supplier is better than nothing.

“A lot of times in the past vendors would not send it if an order was not 80% complete. Now they send it at 40(%) or 50%, which is good because we are able to get product in,” explained Debra Knick, co-owner of outdoor clothing retailer Sonoma Outfitters in Santa Rosa. “We probably do at least 25(%) to 35% of our business in November and December, so it’s really important we have a good holiday season.”

The outdoor company is anticipating people will be returning to shop in person, thus creating an even greater need to have plenty of merchandise. Knick said reordering product is not likely to be an option. “If you see it, get it now” is her mantra because it could be gone if you wait to buy it.

Every type of store seems to be suffering in some way.

“One of my vendors who makes finger paints for children told me they are in danger of not being able to produce their No. 1 product because of a shortage of pigment colors. Everyone is dealing with the fallout from COVID,” said Nancy Putney-Abernathy, owner of Blackbird in Calistoga.

Even though vendors for the unique home goods store in Napa County are telling Putney-Abernathy to buy early, she can’t get everything she wants. “I just attended a trade show in New York and the first thing I asked every vendor before I placed an order was, ‘can you ship?’.

“If you know you can’t get it, you substitute,” she said. “I’m in that process right now.”

Creativity mixed with a bit of normalcy

It’s hard to give a holiday gift of chocolates without a box. And boxes for chocolate are hard to find.

Knowing November and December are its busiest months, the 10-year-old Kollar Chocolates in Yountville opted to pay more to expedite the shipment of boxes to ensure it would be here for the holidays.

Chocolatier Chris Kollar is known for being innovative, but he dialed that back in the last 18 months.

“With COVID and the supply chain issues he decided to stick to the core products and do them well, and make sure we would have products available,” explained Shari Wagner, who is Kollar’s wife and handles the marketing for the company.

Kollar capitalized on the lack of shop visitors during the mandated closures by staging virtual chocolate tastings, taping high profile companies like Google that has used them as team building opportunities. Those are continuing this holiday season with more than 1,500 Google employees expected to participate; with about 100 people per session.

Chocolate tasting kits are sent to a company so everyone gets to sample several confections. Kollar leads the groups in the tasting, educating them along the way, and taking questions at the end.

Sales are going so well at Kollar’s that another production kitchen has been secured.

At the Nut Tree Shopping Center in Vacaville Jennifer Ramser, assistant property manager, said once the center opened in June after being closed for nearly a year the foot traffic has been great. Occupancy is at 95% with 65 retail and restaurant tenants.

At Retroactive Records & Games in Suisun City there’s a 50-50 chance of having what a customer wants because the supply chain is out of whack. To ensure there is product on the shelves for holiday shoppers store manager Trisha Cooper is putting aside duplicates instead of having all of the merchandise out now.

Brett Overshiner, a salesman at the Outdoor Pro Shop in Cotati, said basic items like fishing poles are back-ordered for months — and that’s what sells well at the holidays. In summer it was hard to get anchovies, the common bait used for salmon fishing, because the supplier had trouble getting packaging material.

With the holidays around the corner, this full service fishing tackle store is constructing ways to be more customer oriented. In prior years everything needed to fish for tuna or go crabbing was sold separately. For an additional cost gear is now available fully assembled.

“The one thing I’ve done is special rigging in the store,” Overshiner said. “I’m trying to make something out of nothing, really. It’s making it easier on the person, which is something a lot of customers like.”

While early birds are out holiday shopping now, for bookstores the bulk of purchases are made between Black Friday (Nov. 26) and Christmas.

At Copperfield’s Books instead of each of the nine stores in Sonoma, Napa and Marin counties having to find space for inventory, they can keep it at the central warehouse in Santa Rosa.

“I was talking to the warehouse manager about how to fit everything because we have more now than we usually do,” Aubury Doherty, general manager of the bookstore chain, told the Business Journal.

When vendors said it could take two to four times as long to get product, Copperfield’s started placing orders. It’s not so much books that are the problem to get, but gifts and calendars coming from overseas are the stumbling block.

The goal was to order enough product to last into January.

“We are very lucky to have a warehouse that has been able to keep things flowing. Otherwise there would have been lulls,” Doherty said.