Costco to resume toilet paper and bottled water purchase rationing

  • Costco announced the upcoming buying limits on certain goods during an earnings call on Thursday.
  • The revived buying limits come after countless companies imposed similar rules last year as the pandemic got underway, leaving store shelves stripped of certain essentials.
  • Costco The CFO also observed that major shortages in computer chips are still “impacting many items,” including tablets, video games and major appliances.

Costco Wholesale Corporation, an American multinational company, which operates more than 500 big-box retail stores across the US and 200-plus abroad, announced that it will be imposing buying limits on some goods it sells, during an earnings call on Thursday.

According to Costco‘s chief financial officer (CFO) Richard Galanti, the US retailer will resume limits on purchases of certain “key” items, including toilet paper and bottled water.

Leading the corporate earnings call, Galanti outlined a number of pressures on supply chains and noted an uptick in demand due to the pandemic, claiming that the COVID-19 Delta variant is driving a major run on inventory.

“The factors pressuring supply chains and inflation include port delays, container shortages, COVID disruptions, shortages on various components, raw materials and ingredients, labor cost pressures and trucker and driver shortages,” Galanti said, adding that “planning is crucial” given those challenges.

The CFO did not say exactly when the limits would be reintroduced – with Costco having previously limited purchases for certain goods in the early days of COVID-19. 

Illustrating the reasons for some shortages, Galanti cited the example of one cleaning supply company that’s struggled to keep items on the shelves, saying it faces different problems now than it did in 2020. 

“A year ago there was a shortage of merchandise, now they’ve got plenty of merchandise, but there’s two to three-week delays on getting it delivered because there’s a limit on short-term changes to trucking and delivery needs of the supplier,” he said.

The CFO also observed that major shortages in computer chips are still “impacting many items,” including tablets, video games and major appliances, suggesting those problems “will likely extend into 2022.” 

The revived buying limits come after countless companies imposed similar rules last year as the COVID-19 pandemic got underway, leaving store shelves stripped of certain essentials – perhaps chief among them: toilet paper.

Though retailers have bounced back somewhat since the initial phase of panic-buying, in March, the CEO of a Brazilian wood-pulp producer warned that another global TP-shortage could be around the corner, arguing that a lack of shipping containers could produce a severe bottleneck for distribution. 

Print Friendly, PDF & Email

Read more from the source page

Leave a Reply

Your email address will not be published. Required fields are marked *