Costco Rides Coronavirus-Fueled Panic Buying
March 05 2020 - 6:04PM
Dow Jones News
By Sarah Nassauer
Sales at Costco Wholesale Corp. stores rose as shoppers stocked
up on bulk quantities of everyday goods amid the new coronavirus
outbreak.
The warehouse club operator reported Thursday a 12.1% jump in
comparable sales in the month of February, noting an increase in
demand in the final week of the month as concerns about the virus
mounted in the U.S.
It could have been even higher. But the retailer has struggled
to keep peanut butter, toilet paper, bottled water and other
staples in stock in some markets. Long lines have been common
around the country and the hashtag #CostcoPanicBuying has
circulated on Twitter in recent days.
On Wednesday, Michael LaPayower headed to Costco to buy baby
wipes for his 22-month-old daughter.
"They were completely sold old. They usually have two brands,"
said the 39-year-old software analyst who lives in Staten Island,
N.Y. The store had limited bottled-water purchases to five cases
per customer. Many employees wore latex gloves, he said.
"I just couldn't believe it," he said. "I have been to Costco
before snow storms and they are fully stocked." Instead of baby
wipes, he picked up diapers, toilet paper, water and granola
bars.
The retailer is moving backup goods as quickly as possible to
stores, Chief Financial Officer Richard Galanti told The Wall
Street Journal earlier this week.
Target Corp., Amazon.com Inc. and other retailers have said
demand for many items is high and some are limiting purchase
quantities for certain items or penalizing online sellers for price
gouging.
For the quarter ended Feb. 16, Costco reported comparable sales.
Those from stores or digital operations open for at least 12 months
rose 8.9% during the quarter and 7.9% when excluding the impact of
gasoline prices and currency fluctuations.
Net income was $931 million, up from $889 million a year ago.
Total revenue rose 11% to $39.07 billion in the quarter and the
retailer's e-commerce sales increased 28.4%.
Costco also reported strong sales over the holiday buying season
when other retailers, including Target, Macy's Inc. and Walmart
Inc. faltered, citing weak sales of some categories such as toys
and electronics.
Managing through the demand surge is challenging for retailers.
Large companies that sell consumer staples and attract more middle-
and high-income shoppers are better placed to gain from the
increase in demand, said some analysts. Wealthier shoppers can
spend more to stock up.
(END) Dow Jones Newswires
March 05, 2020 17:49 ET (22:49 GMT)
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