Costco is struggling to keep some products on shelves as frenzied shoppers flock to its warehouses to stock up on disinfectant, bottled water and other goods out of concerns about the coronavirus.
“We’re getting deliveries daily, but still not enough given the increased levels in demand on certain key items,’’ Walmart’s CFO Richard Galanti, said in an earnings call Thursday with investors.
“Clearly, not just at Costco but at other places, you really can’t go in and generally find sanitizing items,’’ he added. “And while we’re getting shipments daily, somewhere in the U.S. in whatever limited amounts … It’s gone pretty quickly. I would assume that over the next few weeks or several weeks that’ll abate. But it depends what else happens with the virus.’’
Retailers see online sales surge
Shoppers, worried about being confined to their homes or other consequences in the wake of the COVID-19 outbreak that has caused 12 deaths in the U.S., have been stripping store shelves bare, filling their carts with bottled water, cleansers and other supplies.
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Online shopping has experienced a surge as well. Sales of products that can safeguard health, such as gloves, masks and sanitizers jumped 817% in February as compared to the previous month, according to Adobe Analytics.
Online sales of toilet tissue soared 186%, while purchases of canned goods, and other non perishable foods rose 69%. Medicines for colds, cough and flu spiked 198%, while emergency supplies rose 58%, Adobe Analytics said.
Costco is a go to for stocking up
Costco has been a prime go-to for many. Worries about the virus led to a roughly 3% spike in the retailer’s sales in the last week of February, a month in which Costco net purchases reached $12.2 billion, Galanti said.
The surge in shopping traffic is “continuing in the first few days of this week,’’ he added.
Limits on how much customers can purchase have been put in place at times, “but may differ regionally based on supply levels,’’ Galanti said.
In the meantime, Costco staffers in the U.S. and overseas “are working in some cases around the clock to procure supplies from both existing suppliers and from other sources where possible,’’ he said.
Shipping getting back to normal
The supply chain for goods was hobbled when Chinese factories, closed for the Lunar New Year, extended those shutdowns because of the coronavirus. But activity is slowly returning to normal.
“In many cases, factories over there were closed for one to two additional weeks,’’ Galanti said. But Costco buyers say that production levels are now up to 60% to 80%.
Problems in the shipping of goods, because of a shortage of containers in the U.S. and slow downs or shut downs at overseas ports “are also abating’’ Galanti said.
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