The Wall Street Journal - 06.03.2020

THE WALL STREET JOURNAL. ** Friday, March 6, 2020 |B3

BYSARAHNASSAUER

BUSINESS NEWS

Sales atCostco Wholesale
Corp. stores rose as shoppers
stocked up on bulk quantities
of everyday goods amid the
new coronavirus outbreak.
The warehouse club opera-
tor reported Thursday a 12.1%
jump in comparable sales in
the month of February, noting
an increase in demand in the
final week of the month as
concerns about the virus
mounted in the U.S.
It could have been even
higher. But the retailer has
struggled to keep peanut but-
ter, toilet paper, bottled water
and other staples in stock in
some markets. Long lines have
been common around the
country and the hashtag
#CostcoPanicBuying has circu-
lated on Twitter in recent days.
On Wednesday, Michael La-
Payower headed to Costco to
buy baby wipes for his 22-
month-old daughter.
“They were completely sold
out. They usually have two
brands,” said the 39-year-old

software analyst who lives in

Staten Island, N.Y. The store

had limited bottled-water pur-

chases to five cases per cus-

tomer. Many employees wore

latex gloves, he said.

“I just couldn’t believe it,”

he said. “I have been to Costco

before snow storms and they

are fully stocked.” Instead of

baby wipes, he picked up dia-

pers, toilet paper, water and

granola bars.

The retailer is moving

backup goods as quickly as

possible to stores, Chief Finan-

cial Officer Richard Galanti

told The Wall Street Journal

earlier this week.

Target Corp., Amazon.com

Inc. and other retailers have

said demand for many items is

high and some are limiting

purchase quantities for certain

items or penalizing online sell-

ers for price gouging.

For the quarter ended

Feb. 16, Costco reported com-

parable sales. Those from

stores or digital operations

open for at least 12 months

rose 8.9% during the quarter

and 7.9% when excluding the

impact of gasoline prices and

currency fluctuations.

Net income was $931 mil-

lion, up from $889 million a

year ago. Total revenue rose

11% to $39.07 billion in the

quarter and the retailer’s e-

commerce sales grew 28%.

Costco also reported strong

sales over the holiday season

when other retailers, including

Target, Macy’s Inc. and Wal-

mart Inc., faltered, citing weak

sales of some categories such

as toys and electronics.

Managing through the de-

mand surge is challenging for

retailers. Large companies that

sell consumer staples and at-

tract more middle- and high-

income shoppers are better

placed to gain from the in-

crease in demand, said some

analysts. Wealthier shoppers

can afford to spend more to

stock up.

Costco Sales Surge on Fears Over Illness

Wholesale club works

to keep peanut butter,

toilet paper, water and

other staples in stock

Customers take some of the last paper towels at a store in Teterboro, N.J. The Twitter hashtag #CostcoPanicBuying has been trending.

SETH WENIG/ASSOCIATED PRESS

event in the United States, we

are not seeing anything so far

that would cause us to change

our guidance,” Chief Executive

Rodney McMullen said Thurs-

day on a call with analysts to

discuss fourth-quarter results.

Kroger’s shares rose 8.1% to

$33.47 on Thursday.

Kroger said sales have ticked

up in recent days for staples in-

cluding water, hand sanitizers,

hand soap, paper towels and

some boxed foods. The com-

pany is limiting how many san-

itization, and cold and flu prod-

ucts individual shoppers can

buy.

In addition to antibacterial

products, other retailers are

seeing a jump in sales of cold

medicines and foods such as

canned tuna, pasta, snack bars

and bottled water, said Chris

Testa, president at United Nat-

ural Foods Inc., which distrib-

utes items to grocers.

He said United Natural

Foods is doubling inventory for

about 350 of the 250,000 items

it distributes based on recent

trends. Grocers in metropolitan

markets are boosting orders

the most, Mr. Testa added.

“We’re saying get in your

demands quickly. Get your re-

quests as early as you can,” Mr.

Testa said.

Jeffrey Braverman, chief ex-

ecutive of Nuts.com, said the

epidemic has caused a holiday-

like rush on his company’s

products including grains,

beans, matcha green tea, pea-

nut-butter powder and antioxi-

dant-rich organic Siberian

chaga mushroom powder. The

company sold as many organic

chickpeas in one day recently

as it usually sells in a month.

“I guess people want their

protein, but we’re selling a ton

of peanut-butter powder,” Mr.

Braverman said.

At Stew Leonard’s Inc., a

grocery chain in the Northeast,

sales for items including pasta,

tuna fish, frozen food and wa-

ter are about 60% above nor-

mal levels, said its chief execu-

tive, Stew Leonard Jr. The

grocer is ordering 25% more of

those items than usual and

plans to load up its warehouse.

“I want to make sure the

shelves are full,” Mr. Leonard

said.

Stew Leonard’s is also clean-

ing its stores more regularly, a

step that restaurants including

Starbucks Corp. have also

taken. Stew Leonard’s has em-

ployees cleaning restrooms and

wiping down shopping carts

and various surfaces at its

stores every two hours.

Pittsburgh-based Giant Eagle

Inc. said it is encouraging shop-

pers to use sanitized wipes

available at the entrances of its

supermarkets to clean their

shopping carts and baskets.

The chain is also asking cus-

tomers who feel unwell to use

curbside pickup or delivery.

Cincinnati-based Kroger said

that although demand is now

on the rise, its sales for the

month of February were in line

with its expectations.

For the quarter ended Feb. 1,

Kroger’s sales at stores open at

least 15 months grew 2%.

Profit increased to $327 mil-

lion, or 40 cents a share, from

$259 million, or 32 cents a

share, the year earlier.

—Micah Maidenberg

and Erin Ailworth

contributed to this article.

KrogerCo. said it is selling
more staple goods as consum-
ers stockpile in preparation for
a wider coronavirus outbreak in
the U.S.
The biggest U.S. supermar-
ket operator said it is too early
to calculate the impact of that
buying on its business and it
has established an internal task
force to monitor the situation.
Other supermarkets and retail-
ers have been preparing for
higher demand for such items
as canned foods, disinfectants
and hand sanitizers.
“While it is obviously very
early for this public health

BYJAEWONKANG

Shoppers Are Stocking Up on Basics, Supermarket Operators Say