Costco announces purchase limits on certain products amid supply chain interruptions

The economy remains one of several issues contributing to President Joe Biden’s steadily declining approval rating.

In a new report, Fox Business provided a real-world example of the economic crisis that seems to be unfolding as a result of the Biden administration’s policies.

Causes of the supply disruption

Costco is reportedly preparing to limit purchases of certain household products, according to Chief Financial Officer Richard Galanti.

He confirmed that goods including “bath tissues, roll towels, Kirkland Signature water, high demand cleaning-related skews,” among other things, could soon have such limits imposed on them.

Reports indicate that the causes for the decision relate to supply chain interruptions and pressures created by inflation.

According to Fox Business, “port delays, higher labor and freight costs, and shortages on everything from shipping containers, trucks, and drivers to various components, raw materials, and ingredients” have caused many items to sell out more quickly than usual.

Galanti also weighed in on the impact of rising consumer prices, noting that third-quarter inflation had been pegged at between 2.5% and 3.5% but could end up as high as 4.5%.

“Mitigate our price increases”

For its part, Costco is paying between two and six times more for containers and shipping as well as sharply increased costs for paper goods, plastic, resin, and other items. As a result, the cost to consumers is expected to continue ticking upward.

Fresh foods, coffee, soda, and many other common products are already significantly more expensive at Costco, though Galanti vowed that the members-only retailer will “continue to work to mitigate cost increases in a variety of different ways and hold down or mitigate our price increases passed onto the members.”

Of course, there is a silver lining for Costco and its retailers. Despite the economic setbacks, the company’s stocks have exceeded expectations with a reported profit of $3.76 per share.

Although the Biden administration has attempted to downplay the threat of long-lasting inflation, Federal Reserve Chairman Jerome Powell recently signaled cause for concern, asserting that supply chain “bottleneck effects have been larger and longer-lasting than anticipated.”

Inflation is trending much higher than the Federal Reserve’s target, a factor that could result in higher interest rates in the near future.

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