People shop for toilet paper at a Costco store in Novato, California on March 23, 2020.
Josh Edelson | AFP | Getty Images
Richard Galanti, Costco’s chief financial officer, said Thursday the company wants to make sure essential items are available in stores, even if delivery delays and the lack of truck drivers make it difficult to keep them on shelves.
During a telephone conversation, he said that the retailer had “some” [purchase] Restrictions on essential items. “These include toilet paper, paper towels, bottled water, and high-demand cleaning products. He did not specify how many of each item customers can buy.”
The new product limits are triggered by a different challenge than in earlier stages of the pandemic, when stores saw unusually high demand for paper products and antibacterial wipes as customers stocked these goods.
“There was a shortage of goods a year ago,” said Galanti. “Now they have a lot of goods, but there are two or three weeks of delays in delivery as short-term changes to suppliers’ transportation and delivery needs are limited.
The member-only store chain on Thursday exceeded analysts’ expectations for the fourth fiscal quarter ended August 29. However, Galanti said the pandemic challenged Costco’s supply chain and increased its costs, as it has done with other retailers.
Costco is placing previous orders to get what it needs, Galanti said. He added that the company has chartered three ocean-going vessels for the next year to move containers between Asia and the US and Canada. Each ship can carry 800 to 1,000 containers at a time, he said.
There were some social media posts back in August about product restrictions on some of its own-brand products. This week, the retailer warned some customers there could be delays in ordering toilet paper online – a household item that has become synonymous with stockpiling. This delay was first reported by Fox Business, which was mentioned in an order confirmation email.
Galanti said Thursday that the demand for jewelry, home furnishings, pharmacies and sporting goods has been strong for the past three months. He said the retailer – best known for being large and bulky – “sold a few rings in the $ 100,000 range”.
Costco’s shares rose less than 1% on Thursday evening. At the close of trading that year, the stock had gained 20% and brought its market value to $ 200.16 billion.