Amid fears of supply disruptions due to a major port strike and increased demand in regions impacted by Hurricane Helene, US shoppers are rushing to stock up on essentials like toilet paper and paper towels.
Costco Wholesale Corp., one of the largest warehouse retailers in the country, reported that several stores have run out of Charmin toilet paper for delivery. Other paper products, including paper towels, are also selling out in various locations, according to the company’s website. Gary Millerchip, Costco’s Chief Financial Officer, acknowledged the higher-than-usual demand for everyday items, particularly paper products, over the last few days. Despite the surge in purchases, he reassured customers that Costco does not anticipate any long-term supply challenges due to the strike and is working quickly to replenish fast-selling items.
Toilet paper, though primarily manufactured in the United States, was one of the first commodities to face supply chain issues during the pandemic, as people hoarded out of fear of shortages. Now, with concerns about a potential disruption stemming from the ongoing strike at major US ports and the aftermath of Hurricane Helene, customers are once again exhibiting similar stockpiling behavior.
In-store observations from northern New Jersey Costco locations by Oppenheimer analyst Rupesh Parikh indicate shopper behavior reminiscent of the pandemic’s early days. Parikh noted “sporadic” outages of products such as detergent, bread, and toilet paper, though on a smaller scale than in 2020.
The source of the current concerns lies with the International Longshoremen’s Association, a 47,000-member union representing workers across every major East Coast and Gulf Coast port. The union initiated a strike on October 1, demanding higher wages and safeguards against automation in the workplace. Given that toilet paper is largely manufactured domestically, it’s more resilient to international shipping disruptions; however, shoppers still fear a knock-on effect from the broader disruption of goods at the ports.
Retailers are responding to the surge in demand. Kroger Co. has implemented temporary purchase limits on key items, including toilet paper, paper towels, and bottled water. Meanwhile, Walmart Inc. is also experiencing higher demand for these products, particularly in regions affected by Hurricane Helene, and is working closely with suppliers to ensure stock availability.
Procter & Gamble, the maker of the popular Charmin brand, and Kimberly-Clark Corp., the company behind Scott toilet paper and Kleenex tissues, are actively monitoring the situation. Kimberly-Clark noted that it has preemptively prepared its supply chain for potential challenges arising from the port strike and is confident in its ability to continue supplying its paper products.
While the immediate surge in demand for paper products may remind many of the early days of the pandemic, the overall situation is not yet as critical. However, with ongoing disruptions from both the port strikes and natural disasters, retailers and manufacturers are taking precautions to minimize any potential supply chain shocks.
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