A new wave of supply chain disruption triggered by a surge in COVID-19 cases in China has reinforced the need for Australian retailers to diversify sourcing.
In electronics, where 100 per cent of products are imported, China accounts for 56 per cent of imports, followed by Vietnam at 10 per cent, the US and Malaysia 5 per cent and Thailand 3 per cent.In furniture and floor coverings, China accounts for 70 per cent of imports, while Vietnam accounts for 6 per cent and India, Malaysia and Indonesia 3 per cent.
“Whilst overall conditions have improved since the height of the pandemic, we continue to experience some delays with getting certain products. The recent increase in COVID cases and restrictions overseas is likely to create some local challenges in the near future.” But Woolford says the fundamental question all retailers have to address is how much product they should source from China in future.
In the Wesfarmers stable, MST Marquee estimates that 68 per cent of Kmart’s goods, 60 per cent of Target’s, 55 per cent of Officeworks’ and about 46 per cent of Bunnings’ products are supplied from China.“We deal with a number of quite significant local manufacturers for areas such as paint, cleaning supplies,” Wesfarmers chief executive Rob Scott told Window Shopping in August. “We also have a range of products we get from around the world, a lot of European and American suppliers.
Super Retail Group’s brands are also exposed, with 61 per cent for Rebel, BCF and Macpac products and about 50 per cent of Supercheap Auto’s products estimated to be sourced from China.