Costco to Set Purchase Limits on Essential Items

Costco to Set Purchase Limits on Essential Items

Costco (NASDAQ: COST) has implemented purchase limits on specific items such as toilet paper amid ongoing supply-chain delays and the increase in delta variant cases. According to Chief Financial Officer Richard Galanti, the company wants to make sure it is stocked up on essential items within its stores.

In an earnings call, Galanti revealed that Costco is “putting some [purchase] limitations on key items.” The items in question are toilet paper, paper towels, bottled water and high-demand cleaning products. Nevertheless, he did not disclose how many of each item customers would be able to purchase.

Amid the ongoing delta variant, Americans are said to be stocking up crucial supplies.

“A year ago there was a shortage of merchandise,” Galanti said. “Now they’ve got plenty of merchandise but there’s two- or three-week delays on getting it delivered because there’s a limit on short-term changes to trucking and delivery needs of the suppliers, so it really is all over the board.”

As a means of staying ahead of the demand, Costco is placing earlier orders, Galanti said. He added that the company had chartered three ocean vessels for the next year in order to transport containers between Asia and the U.S. and Canada. Each ship has room to carry 800 to 1,000 containers per trip.

Costco’s stock has risen 20% throughout the year and has a current market value of USD200.16 Billion.

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