How Costco is benefitting from UK Shopping supply shortage

You are not alone if you are struggling to purchase your usual Essential Shopping Items lately. In fact, you are just one of a growing amount of British folk who are experiencing this inconvenience. And, things will likely get worse, the closer we get to holiday season. However, as we shall see,  Costco is one of the few who are potentially benefitting from the UK Shopping supply shortage.

Metro in citing the Office for National Statistics, says around one sixth of shoppers have been unable to obtain their usual essential shopping list items, with an even greater percentage, 25% unable to find all the ‘non-essential’ things they need. Why?

The issue relates to the supply chain..it’s not working well at this time, and so many shelves are far barer than they would normally be. But, why mention Costco? And how have they fared?

 

Wholesale Suppliers Costco Bucking The Trend

 

It stands to reason that if there is any disruption in the supply chain, that smaller ‘express’ or ‘metro’ supermarkets would be the first to reflect it. But, where do shoppers go when that happens? The likely destination are the larger supply warehouses and supermarkets…their supplies are designed to be sold in bulk, so their stock levels are usually much higher. And that is the reason why some Costco stores are benefitting from the current problems.

As an example, Costco in Manchester has experienced lengthy queues of needy customers, all trying to source the essential items that they need..and at wholesale, or cheaper prices. Which essential item would you opt for first? If you said toilet paper, you will now understand that stocks of this essential bathroom supply are once again being stretched.

However, toilet paper is not the only thing that is experiencing peak demand..consider supplies for the holiday season.

Grocer magazine has found that around two thirds of shoppers fear that they will not be able to get the holiday supplies that they need…and around a third have turned that fear into action by starting to stock up now..a full two months prior to the holiday period. If supply disruptions continue, those numbers are only likely to head in one direction..up

 

Costco Bucks The Trend…

 

As mentioned, wholesale suppliers such as Costco, have become the go to option when local supermarkets run low. However, any potential increase in revenue for the international mega brand, will obviously come at a cost to someone else. Who?

It has been reported that the ‘Big Four’ Supermarkets, which are: Asda, Morrison’s, Sainsbury’s, and Tesco have lost an estimated £2billion in sales due to their dwindling supply stocks. Whilst Costco will not likely be the sole beneficiary of those losses, they stand in line to take a ‘lion’s share’ of the lost revenue.

However, the supply disruption is only one cloud in a potential ‘perfect storm’ that is impacting the UK retail sector. What other factors could potentially exacerbate the problem?

When you add supply disruption to rising gas prices, and fuel supply issues, then the problem is exponentially more severe. And, when those problems come together just prior to the holiday season, you end up with a ‘perfect storm’.

 



Have The Numbers Shown Any Crisis?

 

 

A recent poll of 3326 adults, discovered that more than half,(57%) had not yet experienced disruption in their essential supplies. Despite this, around 60% had been aware of unusual shopping environments. Why?

The environment that we experience is not just down to stock numbers. It also includes the variety of items that we are able to purchase. And, it is in this second category where pressures are also being felt, with almost half (43%) finding that their shopping has less variety, and a further 14% going from shop to shop in order to source what they need.

 

 

 

An Ominous Warning

 

The number above don’t yet constitute a full-blown crisis. Yet, storms clouds are noticeably gathering.

Shane Brennan( Cold Chain Fed.) in an interview to The Grocer, said:

 

‘The biggest choice every one of the major supermarkets has got this week is: are we going to have a survival of the fittest Christmas or are we going to all work together and try and get through Christmas?’ 

 

This ominous warning..with it’s ‘survival of the fittest’ reference should cause us to give notice to the warning. The warning is that dark clouds have gathered, and a storm approaches. Hopefully, a warm southern wind will blow them away. However, if it doesn’t, we could well be joining the long lines outside of Costco in order to get our holiday essentials.

By admin

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