Sept. 27, 2021 -- Warehouse retailer Costco has placed new “limitations on key items” such as toilet paper, paper towels, bottled water and cleaning products due to a recent increase in demand and several supply challenges, according to The New York Times.
The company didn’t specify the exact limits per customer but noted that supplies were affected by port delays, container shortages, limits on raw materials and ingredients, labor cost pressures, driver shortages, and other pandemic-related disruptions.
“A year ago, there was a shortage of merchandise,” Richard Galanti, executive vice president and chief financial officer of Costco, said during the company’s latest earnings call on Thursday.
“Now they’ve got plenty of merchandise, but there’s 2- or 3-week delays on getting it delivered,” he said.
Galanti also said there was an “uptick in Delta-related demand” in parts of the country where the more contagious Delta variant has created a surge in COVID-19 cases in recent weeks.
To meet the demand and keep shelves stocked, Costco has been “ordering as much as we can, getting it in earlier,” he said.
Costco has chartered three ocean vessels for the next year to transport containers between Asia and the U.S. and Canada, he said. Each ship can carry 800 to 1,000 containers at a time.
In addition, Galanti said the company has seen an increase in price inflation on its products this quarter, which is estimated to be between 3.5% and 4.5%.
Other companies in the supply chain are trying to address the delays, according to USA Today. Kimberly-Clark, which makes Cottonelle, Scott, and Kleenex tissues, said that it was “monitoring the situation closely.” Georgia-Pacific, which makes Angel Soft, Quilted Northern, Brawny, and Sparkle products, said customers “may be experiencing small demand surges locally and we are responding.”