Customers who have ordered garden sheds from a Perthshire firm have been hit with a surprise request for an extra payment.
Gillies and Mackay, based near Errol, sell sheds, summerhouses and garden rooms that range in price from £800 and £20,000.
The company, set up in 1989, has put prices up by 17.5% as it aims to protect the business from a spike in timber prices.
The popular firm’s order book is completely full until March 2022.
Customers who have placed orders have now been asked to pay a “discretionary” additional 5%.
Sleepless nights over cost of timber
Cara Mackay, Gillies and Mackay managing director, said less than half of existing customers have agreed to pay extra amount, with some refusing.
She insists the firm needs more customers to take on the additional payments in order to protect the business.
She admitted to having sleepless nights about asking customers to put their hands in their pockets further.
“We really need 75% to contribute not to have to reduce the profit share – we’ve already taken a hit of a third, and that makes us really tight,” she said.
“We can’t have a van break down, or machinery break. It takes away that security.”
She is “massively grateful” to the 40% of existing customers who have contributed so far, but admits they need more to put their hands in their pockets.
Price rise to protect jobs
Ms Mackay said she was doing “everything I possibly can” to avoid making cuts to the company’s 18-strong staff.
She continued: “Our business is built on people. Coming to that decision of having to let people go is one that I am massively fearful of.
“I’m doing everything I possibly can for that not to be the scenario.”
She acknowledges the price rise may have an impact on orders.
“It’s difficult to say what impact the increase will have on sales,” she added.
Why has the price of timber gone up?
Ms Mackay said the price has been caused by uncertainty over Brexit, the Covid-19 pandemic and a surge in orders from the USA and China.
“People started stockpiling when there was uncertainty over a [Brexit] deal, then when we came out of the union importing and exporting has become more difficult,” she said.
“That created a fear and people were stockpiling, then Covid hit and everything shut across the UK and Europe.
“Since then we’ve had to deal with the US and China buying up all the wood they can get their hands on.
“That’s been the past six months and it has had a massive impact.”
With a 100% increase in timber costs since last June, Ms Mackay said Gillies & Mackay raising the price of its sheds was the only option.
“We can’t consume that size of increase within our profit share.
“We have to pass it on to the customers,” the managing director, daughter of co-founder John Mackay, added.
She shared a video to explain the decision to customers.
Ms Mackay wants to discuss the matter with local politicians about providing support to businesses like hers.
“There has been talk of investment in our industry for years,” she said.
“We are just looking for some recognition that we are dealing with this through no fault of our own. We’re trying to manage as best we can.”
