EsRetailers of all varieties have had to deal with an extension of U.S. tariffs on exports from China, as discussed in Panjiva’s research of Nov. 27. The extension of tariffs to include furniture in Sept. 2018 and a wider range of consumer goods in Sept. 2019 and potentially in Dec. 2019 has led most retailers to pursue an “all-of-the-above” approach.
Family restaurant chain and furniture retailer Cracker Barrel is no exception. The firm’s CEO, Sandra Cochran, has stated that “probably the biggest (issue) for us this particular quarter was the tariffs.” That’s led the firm to pursue three main strategies including “designing the assortment through evaluating alternative suppliers, working with our vendors to share the cost. In some cases, changing our pricing“.
Panjiva data shows that U.S. seaborne imports associated with Cracker Barrel have fallen by 13.2% year over year in October after an increase of 12.8% in 3Q. While that’s been associated with stockpiling ahead of tariff increases in September for many retailers, in Cracker Barrel’s case the firm has actually increased sourcing from China by 11.4% in Oct. after a 22.8% in 3Q. China represented 83.9% of the total in last 12 months to Oct. 31.
Source: Panjiva
That may represent Cracker Barrel stockpiling ahead of the December tariff round. Duties scheduled to be applied from mid-December will cover toys, which are how most of Cracker Barrel’s imports are classified. The firm is already importing part of its needs of toys for both toys and furniture from South Korea, with the country representing 7.8% of toy imports and 8.2% of furniture.
Similarly Cracker Barrel also sources Xmas decorations from South Korea and India, though only 3.6% of imports are from those countries – some tough decisions will be needed for the 2020 holidays.
Source: Panjiva
