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Costco Reinstates Purchase Limits On Toilet Tissue, Cleaning Products And More

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People buy toilet paper at a Costco store in Novato, Calif., March 14, 2020.

Josh Edelson | TBEN | Getty Images

Costco CFO Richard Galanti said on Thursday the company wants to make sure it has essential items in stores, even as shipping delays and truck driver shortages make it difficult to keep them on shelves. .

On a earnings conference call, he said the retailer was “putting [purchase] limitations on key items. ”These include toilet paper, paper towels, bottled water, and high-demand cleaning supplies. He did not specify how much of each item customers will be able to purchase.

The new product limits are driven by a different challenge than in previous phases of the pandemic, when stores saw unusually high demand for paper products and antibacterial wipes while customers stocked these products.

“A year ago there was a shortage of goods,” Galanti said. “Now they have a lot of cargo, but there are two or three week delays in delivery because there is a limit to the short term changes in the trucking and supplier delivery needs, so it really is. all over.”

The member-only chain of warehouses beat analysts’ expectations Thursday for the fiscal fourth quarter, which ended Aug. 29. Yet, Galanti said, the pandemic has strained Costco’s supply chain and increased its costs, as it has done at other retailers.

Costco is placing past orders to get what it needs, Galanti said. He added that the company had chartered three ocean-going vessels for the next year to transport containers between Asia and the United States and Canada. Each ship can carry 800 to 1,000 containers at a time, he said.

As early as August, there had been social media posts about the limitations of some of its private label products. This week, the retailer warned some customers they could experience delays when placing an online order for toilet paper – a household item that has become synonymous with storage. This delay was first reported by Fox Business, which saw it mentioned in a purchase order confirmation email.

Galanti said Thursday that demand was strong for jewelry, home furnishings, drugstore and sporting goods over the past three months. He said the retailer – best known for its big and bulky – “has sold a few rings in the order of $ 100,000.”

Costco shares rose less than 1% Thursday night. By the close of the market, the stock had gained 20% this year, bringing its market value to $ 200.16 billion.

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