Costco brings back purchase limits on toilet paper and more
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People shop for toilet paper at a Costco store in Novato, California on March 14, 2020.
Getty Images Richard Galanti, Chief Financial Officer of Costco said on Thursday that the company wanted to ensure it had essential products in stores despite delays shipping and shortages.| AFP | Getty Images
Costco Chief Financial Officer Richard Galanti said Thursday the company wants to make sure it has essential items at stores, even as shipping delays and truck driver shortages make it hard to keep them on shelves.
During an earnings call, he said the retailer is “putting some [purchase] limitations on key items.” These items include high-demand products such as toilet paper, paper towels and bottled water. It was unclear how many items customers would be allowed to purchase.
The new product limits are prompted by a different challenge than the ones in earlier phases of the pandemic, when stores saw unusually high demand for paper products and antibacterial wipes as customers stockpiled those goods.
Galanti stated that a year ago, there had been a shortage in merchandise. Galanti said that although they have plenty of merchandise, there are two to three weeks delays in getting them delivered. This is due to a short-term limit on changes in trucking or delivery requirements of suppliers.
Analysts had high expectations for Thursday’s fiscal fourth quarter. It ended August 29. Galanti explained that Costco’s supply chains have been affected by the pandemic and it has seen an increase in costs.
Galanti explained that Costco has placed earlier orders to secure what it wants. Galanti said that Costco has charter three ocean vessels to carry containers between Asia, the U.S., and Canada over the coming year. He said that each ship is capable of carrying 800-1000 containers.
There had already been social media posts in August about some product restrictions for private-label products. This week, the retailer warned some customers that they may see delays when they placed an online order for toilet paper — a household item that has become synonymous with stockpiling. That delay was first reported by Fox Business, which saw it mentioned in a purchase order confirmation email.
Galanti claimed that the demand for jewelry, household goods and sports items was high during the past three-months. He said the retailer — best known for big and bulky — “sold a couple of rings in the $100,000 range.”
Costco shares rose less than 1 percent on Thursday night. At the closing of the markets, Costco’s stock was up less than 1%. This brings its market value at $200.16billion.
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