![]() ![]() COVID-19’s effect on the domestic supply chain depends on how fast and how far the virus ultimately spreads. The most serious scenario is also the most variable. Supply chain disruptions lead to shortages. ![]() This situation could negatively impact the international assortment mix of items at North American Costco locations.ĥ. Regardless of COVID-19’s spread in the US, expect shipments from Costco suppliers in East Asian markets like China, South Korea, and Japan to continue declining as new infections appear and ports see reduced activity. Costco has difficulty importing items from East Asia. Instead, they may keep pace with ongoing emergency preparedness.Ĥ. Costco’s sales may not fall in the near future to counterbalance today’s preparation. The virus sets a new normal for stocked goods for the foreseeable future.ĭepending on how long the virus impacts the US, having an extended stock of emergency supplies could become the new status quo for many Costco member households. Preparing for an emergency can mean buying in bulk, so some people may buy at Costco for its bulk value instead of at competing retailers.ģ. Some of Costco’s sales bump could be replacing sales at retailers that shoppers might otherwise visit for a fill-in or immediate-use trip. The sales gain ends up being incremental to Costco at the expense of other retailers. That’s because, having just stocked up in a big way, shoppers may not need to visit Costco as frequently as they usually do in the near term as long as their supplies last.Ģ. Wall Street might have looked favorably on Costco’s sales bump, but it’s possible the retailer achieved little net gain. Panic buying lowers sales in the near term. Here are several possible scenarios for how the outbreak could affect Costco:ġ. Forecasts and predictions will shift and evolve weekly and even daily as the virus’s speed and reach come to light. For Costco, along with the rest of the nation, much is uncertain. This is likely only the beginning of how the coronavirus disease will significantly impact domestic US retail. Even in Massachusetts, with only two confirmed cases of the disease, empty pallets dotted the club.Įmpty Pallets at Costco in Everett, Mass. However, Costco was affected especially strongly with whole categories being picked clean hours after new shipments arrived. Walmart, Kroger, Target, and other retailers also experienced shortages, especially on the West Coast. The urge to prepare for a possible widespread viral outbreak in the US was not limited to Costco. US unease over the COVID-19 virus boiled over in a concrete way this past weekend as crowds poured into their local Costco clubs to stock up on toilet paper, disinfectant wipes, packaged foods, tissues, bottled water, and other household staples. ![]()
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