Luxury items 

Costco limits the amount of toilet paper you can repurchase

The Delta variant continues to spread across the world, increasing demand for these items. But that’s not the only reason Costco is limiting purchases. The warehouse store is also struggling to find trucks, drivers and shipping containers to get the items to its stores.

“Factors putting pressure on supply chains and inflation include delays at ports, container shortages, Covid disruptions, shortages of various components, raw materials and ingredients, cost pressures from labor and truck and driver shortages, ”Costco CFO Richard Galanti said, speaking to investors after a quarterly report. results Thursday night. “Several major brands are asking for longer delivery times and, in some cases, difficulty in finding short-term drivers and trucks. “

While the increase in Covid cases may lead to increased demand for some items, Galanti’s comments have focused more on issues with getting products to stores. He said problems with the company’s supply chain were causing him to order items earlier than he would otherwise.

But if panic buying is the root of the shortages now, a policy like Costco’s sales limits could cause shoppers to run over those same items, said Steven Taylor, professor in the University’s Department of Psychiatry. of British Columbia.

“Over the past couple of years, people have become conditioned to respond with panic buying whenever they learn of a foreclosure or impending shortage,” he said. “And so far, efforts by community leaders have been ineffective in controlling panic buying episodes. Our leaders usually say something like, ‘Don’t panic! There is enough toilet paper! “This message backfires because it associates, in the minds of buyers, toilet paper and panic.”

This, he said, is known as the “innuendo effect” in social psychology. While purchasing limits prevent some shortages, they often fuel buyers’ fears.

“Even with the limits on purchasing, we are likely to see a resurgence of panic buying, especially now that buyers have realized that current shortages may be due to bottlenecks in the supply chain,” he said. Taylor added.

Rather than simply paying to move freight containers from Asia to North America, Costco chartered three container ships, with each ship capable of carrying 800 to 1,000 containers at a time. Costco expects to be able to make 10 transpacific trips per year with the ships.

Shipping costs make some items more expensive, adding to other inflationary pressures.

“Pulp and paper price increases, certain items [are] up to 4% to 8%, ”said Galanti, Costco’s chief financial officer. Plastic items, such as trash bags, Ziploc bags, disposable cups and plates are up 5% to 11%. Non-durable metal items like aluminum foil and beverage cans are up in the mid single-digit range.

Costco reported slightly better than expected profits for the fiscal fourth quarter which ended on August 29. Its shares were slightly higher in pre-market trading on Friday on the report, and are up 20% so far this year.

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