Coronavirus may be wreaking havoc on the global economy, but it's provided a nice sales boost to at least one prominent global retailer. Costco saw a spike in consumer demand in February, which the chain attributed "to concerns over the Coronavirus."
In its latest earnings results, the company said the uptick in demand had a 3% "positive impact on total and comparable sales."
Costco CFO Richard Galanti told analysts in the earnings call that the company was "keeping a close eye on the developments of the coronavirus," specifically the safety of its members and employees, its operations, and its supply chain.
"Members are turning to us for a variety of items associated with preparing for and dealing with a virus such as shelf stables, dry grocery items, cleaning supplies, Clorox and bleach, water, paper goods, hand sanitizers, sanitizing wipes, disinfectants, health and beauty aids," Galanti told analysts on Thursday.
He said that warehouses are having trouble keeping up with members, adding that the surge in demand has been "a little crazy." And that's despite the fact that warehouses are receiving deliveries of crucial supplies daily.
Galanti said that the chain will be placing quantity limits on certain products based on the region. The company will also adopt certain precautions within locations, including wiping down shopping cart handles with sanitizing wipes and setting up sanitizing wipe stations throughout the warehouses.
On the operations side, a handful of Costco warehouses in Korea closed for a few days, and the location in Shanghai is limiting the number of members allowed inside at once. Galanti also addressed supply chain issues, including the fact that many manufacturing facilities in China remained closed beyond the Chinese Lunar New Year holiday due to the outbreak.
One aspect of Costco's business that has suffered, despite the bounce in sales, is its in-house travel business. Galanti cited reduced demand and a sharp climb in cancellations on cruises and international travel.
"I don't think there's any surprise with that," he said.
The CFO thanked the company's "awesome" warehouse employees for keeping everything running smoothly, despite the fact that locations have been "beyond busy."
"The last week and a half has been quite good with the sales, but we'll see what tomorrow brings," Galanti said.