Costco brings back purchase limits on toilet paper, cleaning supplies and more amid supply chain crisis

Retail giant’s problems exacerbated by port congestion, labour shortages caused by pandemic, panic buying

The purchase limits will apply on items such as toilet paper, bottled water and cleaning supplies (AP)

Costco has decided to limit the purchase of certain essential items in order to make sure its supplies last as US customers resort to panic buying amid a rise in Covid-19 cases.

Richard Galanti, the company’s chief financial officer, said it is “putting some [purchase] limitations on key items” such as toilet paper, bottled water and cleaning products among others. It is not yet clear how many items a customer is allowed.

As coronavirus infections climb in the US, many customers fear a new lockdown and are buying and stock-piling essentials items. The seven-day average of new Covid-19 cases in the US was 134,000 this week, up from 77,000 cases in the last week of July.

Besides panic buying, which has persisted over the two years of Covid-19 pandemic, the American retail giant’s problems have also been exacerbated by port congestion and labour shortages caused by the pandemic, resulting in supply chain delays.

“A year ago there was a shortage of merchandise,” Mr 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.”

The decision came after some delays were noticed in the shipping of online orders of toilet paper in the last few weeks, with the retailer warning customers about it in its confirmation emails, as reported first by Fox Business.

Some customers also flagged product limitations for some of the company’s private label products, according to CNBC.

Costco beat expectations in its quarterly results amid a strong demand after lockdown and amid the ongoing vaccination drive, resulting in a one per cent jump in its share prices on Thursday.

The company’s total revenue rose to $62.68bn (roughly £45bn) in the fourth quarter from $53.38bn (around £38bn) a year earlier, compared to the market expectations of $61.30bn (£44bn), according to IBES data from Refinitiv.