More than 113 million people are Costco memberships, according to the wholesaler’s latest data. These loyal buyers may have experienced some setbacks this year. In September, Costco had to set purchasing limits on some items, effectively restricting its purchasing model for certain purchases. Then, in November, the company had to pull some Kool-Aid products out of its stores after numerous containers were recalled for potential contamination with bits of metal and glass. Now the company is sending an important warning to its millions of customers before the Christmas holidays. Read on to find out why Costco is sending out an urgent announcement.
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Shipping delays weren’t uncommon this year, but Costco is now warning customers that those delays will affect the upcoming holiday. Clogged ports, a shortage of truck drivers and a shortage of raw materials have continued to make it difficult for retailers to stock shelves before the holiday shopping season, according to Reuters.
And although many retailers try to mitigate these problems in various ways, e.g. For example, by using air freight and ordering products early, Costco still expects delays in both toys and seasonal items. “In fact, some of the inventory won’t make it until Christmas.” Richard Galanti, Costco’s chief financial officer, confirmed during a conference call on December 9, according to Reuters.
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According to Bloomberg, about 79 percent of Costco’s imported containers were delayed by an average of 51 days. However, Galanti praised the company’s work in keeping the shelves in stock despite these shipping problems. In fact, the CFO said that Costco’s relatively narrow product range gives it an advantage in terms of inventory management compared to other companies selling a wider variety of products.
“We’re feeling pretty good about staying in stock,” Galanti said on the call via Bloomberg. “Overall, we feel we have handled the supply chain challenges pretty well.”
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While Costco admits inventory issues ahead of the holidays, other retailers are singing a different tune. Both Target and Walmart recently announced that they plan to replenish shelves this holiday season despite supply chain issues. In November, Target announced that its inventory levels were up 20 percent this year compared to last year, according to Fox Business. And Walmart CEO Doug McMillion told customers in a video message that the company’s inventory had increased 11.5 percent.
“Despite the various macroeconomic and industry-specific challenges, our inventory is good,” Brett Briggs, Walmart’s CFO, said on a conference call about Fox Business results. He added that the retailer is “off to a good start into the holiday season and is in a good position to continue to deliver strong results”.
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If you do your Christmas shopping through the Costco online store, you might run into some problems this year too. According to a letter from the president posted on the company’s website, Craig Jelinek“Online shopping and shipping volumes are expected to be at an all-time high over the 2021 holiday season,” which may lead to some delays. “Expect small delays in parcel delivery,” he wrote, noting that the company does not anticipate delays affecting “large and bulky” items such as furniture, grills, mattresses and appliances.
“Please know that we will do our part to ensure that your purchases are delivered to you quickly and efficiently,” added Jelinek. “We strive to give you accurate estimates of delivery times before placing your order, to post regular updates on our website, and to provide easy access to tracking information for your order … Should we encounter any unexpected problems after placing your order we will contact you by email. “
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