Costco’s buying team is “working around the clock to procure supplies” following customer bulk-buying due to the coronavirus outbreak.
Richard Galanti, the wholesaler’s chief financial officer, told investors there had been a dramatic increase in demand for items such as dried groceries, cleaning supplies, water and sanitisers.
“We’re doing our best to stay in stock of these items. We’re getting deliveries daily but still not enough given the increased demand,” he said.
However, Galanti added Costco’s procurement team is working to “procure supplies from both existing suppliers and from other sources where possible” to keep up with the demand.
The supply chains for most products are returning to normal, but for key products, it will take “a few weeks”, he said.
“There are suppliers literally working around the clock to produce and to ship but again people are coming in and buying stuff.
“We just don’t know what’s going to happen tomorrow. The first order of business is to get the supply chains back open and running well,” he said.
Galanti’s comments come as some retailers have started restricting sales of household goods and cleaning.
According to the BBC, Tesco has banned shoppers from buying more than five antibacterial gels, dry pasta, and UHT milk, among other items.
Meanwhile, the Asian Development Bank has predicted global economic loss as a result of the virus could range from $77bn to $347bn.
Kerstin Braun, president of supply chain finance business Stenn Group, said: “With markets fluctuating like crazy as the coronavirus takes its financial toll on global economies, and oil prices at unpredictable lows, for us, this marks the beginning of a recession.”
Earlier this year, research found half of UK and US businesses predicted a recession and a third predicted an international global crisis.
“Just three months into 2020 and we're starting to see this play out,” Braun said.
“Chinese companies are operating at a one-month cash flow only, and if not supported by their stronger buyers in the Western world, then it's likely these Chinese firms will default and we'll see an even harsher global collapse. Our purpose is to support manufacturers in China to avoid this outcome,” she said.
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