HIGH POINT — While many retailers are trying their best to figure out the best way to approach the potential price increases associated with tariffs, others have already found their way.
For retailers who specialize in Made in America product, the ability to tell a tariff-free story became that much more appealing this week.
“I’m not worried about tariffs. We have some Chinese and Vietnamese imports, but it’s a small part of the business. If the imports dry up, we’ll be fine,” Jim McIngvale, owner of Top 100 retailer Gallery Furniture, told Furniture Today. “I’m waving the red, white and blue unapologetically.”
McIngvale likened the prior situation to a one-way toll, in which one party has to pay to travel the road, but another party on the same road doesn’t.
“We’ve got to make something in this country. We’ve got to make furniture, we’ve got to make houses, we’ve got to make cars,” he said. “If they charge us 10%, we should be able to charge them 10%.”
Mark Mueller, president of Belleville, Ill.-based retailer Mueller Furniture, said nearly all of his stores’ case goods are domestic, and a good portion of its stationary upholstery is also American-made, putting the retailer in a good position. He said he’s meeting with his ad agency this week to figure out ways to leverage it.
“We have a huge amount of tariff-free inventory and then custom orders on domestic orders,” Mueller said. “Not only is it custom in finish and size, but you’re not having to face this cost increase in tariffs. I think that’s part of our unique selling proposition.”
Motion upholstery is the main area in which Mueller is reliant upon imports, and he said that could create some discomfort in the short term. Specifically, what about sales made earlier this year that are yet to be fulfilled?
“Now, since they’re not on the water yet, they’re subject to tariffs, and we’re going to eat a lot on those sales,” he said. “That’s the nature of the business. That’s the game we’ve chosen, and we’re going to deal with it with a good attitude and our heads up.”
Mueller wondered since freight prices are currently lower, if manufacturers can find a way to build that into pricing to offset some of the tariff-based increases.
Bobby Watson, co-owner of Redwood City, Calif.-based Hoot Judkins, also has a heavy domestic furniture presence. That said, he still anticipates a few shocks.
“We source the majority of our products from domestic suppliers, which puts us in a better place to manage the effects of this policy,” Watson said. “While I expect some price increases — especially since most domestic manufacturers still rely on imported parts — our price hikes should be relatively modest compared to competitors who rely heavily on imports. This could make our products more attractive to consumers.”
He said another possible concern is the broader impact on inflation, particularly if most consumer goods become significantly more expensive. That could cause furniture shoppers to delay buying.
“In the short term, I anticipate a dip in sales. Consumers tend to be cautious during times of uncertainty,” Watson said. “However, in the long term, I believe we’ll see an increase in sales, potentially with less competition in the market.”
Watson said he’s facing whatever comes optimistically. “Thinking of the President’s latest tariff policies, I’m reminded of the chorus from one of my favorite songs by R.E.M.:
‘It’s the end of the world as we know it,
It’s the end of the world as we know it,
It’s the end of the world as we know it, and I feel fine.’”
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