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October 22, 2018
Boos & Co. has been making butcher block cutting boards and countertops and kitchen tables, islands and carts featuring butcher block tops in Central Illinois for more than 130 years. In addition, Boos manufactures commercial stainless-steel work tables, enclosed-base cabinets and compartment, platter and bakery sinks.
Although Boos enjoys high-level brand awareness and its products typically command premium prices, the company is as diligent as any in controlling product and operating costs to ensure that consumers consistently view Boos products as providing excellent value for the money. Toward that end, over the past decade Boos has invested many millions of dollars in new manufacturing plants for both their wood and stainless-steel product lines. Both state-of-the-art facilities were designed for efficient high-speed manufacturing in order to keep production costs in line.
However, material input costs are much less controllable and of late, have been steadily rising. In response, Boos Management has announced that prices will increase at the start of the new year. In the company’s price increase announcement, Ted Gravenhorst Jr., V.P. of Sales and Marketing, pointed to higher costs of stainless steel and lumber, in particular, plus rising costs for transporting raw materials to plants and finished products to customers.
Steel prices have been impacted by 25% tariffs imposed on most imported steel beginning in February. The tariffs, intended to combat low-priced steel from China, have enabled domestic manufacturers to raise prices. For example, US Steel reported that prices of its US-made steel rose 5% to 10% during the second quarter of 2018.
U.S. lumber prices have likewise been impacted by tariffs in 2018 (on Canadian lumber imports), as well as by high demand fueled by strong growth in the number of housing starts and hurricane repair and rebuild efforts. After climbing about 30% during this year’s first half, commodity futures prices for lumber have fallen precipitously since then, reflecting slowing housing demand. During second quarter, home sales declined 2%, impacted by rising interest rates and home prices.
The third key cost driver mentioned by Boos’ Gravenhorst - rising truck freight costs – jumped 1.3% in June - the largest monthly increase since record keeping began in July 2009. The key contributing factor is overall strength in the U.S. economy, exacerbated by low unemployment and tight supply of truck drivers, which forces freight carriers to push up wages and even to offer signing bonuses.
The amounts by which Boos will increase prices vary widely, but generally fall in the range of 3 to 10 percent. Maple and cherry countertop prices will move up 3%, for instance, whereas cherry and walnut countertop prices will jump 6%. Notably, some prices will not change and some will actually decrease.
This news update is provided by Butcher Block Co. – the leading online seller of John Boos countertops and kitchen furniture, including butcher block tables, islands and kitchen island carts.
For more information, please visit Butcher Block Co.
Contact Info:
Name: Kathleen Grodsky
Organization: Butcher Block Co.
Address: 10448 N 21st Pl
Phoenix, Arizona 85028
Phone: (877) 845-5597