Coronavirus Hurting Business Around The World
Coronavirus Hurting Business Around The World
Coronavirus fears have led to consumers rushing to Costco to stockpile on products from toilet paper to shelf-stable grocery. The wholesale club said those concerns have driven higher demand in the last week of February. (Photo by William WEST / AFP) (Photo by WILLIAM WEST/AFP via Getty Images) AFP VIA GETTY IMAGES
As the coronavirus outbreak continues to spread from China to other countries including the U.S., more American consumers are stocking up on everything from shelf-stable food items to tissue paper. Costco Wholesale Corporation is one retailer that’s observed the big change in business and consumer behavior.
The world’s largest membership-based wholesale club said Thursday that consumer concerns over coronavirus, especially after the CDC last month warned of potential outbreaks in the U.S., led to an uptick in demand in the last week of February, a pattern that has continued into March.
Costco said the demand jolt in the last week of February lifted its comparable-store sales for the month by 3 percentage points, for an 11.7% jump in February. Just how big was that increase? For the first 26 weeks of Costco’s fiscal calendar year, its same-store sales rose an already-enviable average of 7%, excluding the impact of foreign currency and gasoline sales. (Same-store sales are a key industry performance metric that excludes newly opened and closed stores.)
“It’s been a little crazy,” Costco chief financial officer Richard Galanti said on a conference call late Thursday when the Issaquah, Washington-based company reported better-than-expected fiscal-second-quarter profit and sales. “There are so many people coming in. Shopping frequency is off the charts. People are bulking up on certain items.”
The big surge in demand and traffic wasn’t just limited to the U.S., where February same-store sales jumped 12%. In Canada, comparable sales rose 10%. Other overseas markets saw sales up a combined 13.5% on average.
