Experts say panic buying is all about control—or lack thereof. Consumers are worried and feel powerless, so they focus on fortifying their homes. And Costco Wholesale, the members-only warehouse that sells goods in bulk at nearly 550 U.S. locations, is arguably the epicenter of consumer panic in the midst of the coronavirus pandemic.
One employee at a Costco in Oregon, who asked not to be named out of fear of retribution by her employer, described the scene at her warehouse as “crazy” and “nonstop.”
Reports of product shortages have prompted some shoppers to set up camp chairs outside two-and-a-half hours before the warehouse opens at 9:30 a.m. And, on Friday, March 13, she said they had 660 cardholders pass through the front doors within 15 minutes of opening.
But, because some of these members brought guests, she said it’s impossible to know the actual number of customers who flooded the store. And, while some locations have limited the number of shoppers who can enter, most have not. (Indeed, location data company Foursquare reported visits to bulk retailers like Costco were up nearly 39% between the week ending Feb. 19 and the week ending March 13, with the largest spike in the New York area at 51%.)
Another challenge for those on the floor at Costco is that the overall sense of panic and uncertainty hasn’t yielded the best shopper behavior.
While her store has implemented limits on high-demand products like dairy, eggs, toilet paper, towels and baby wipes to curb hoarding, she noted that the shopping frenzy has made it difficult for employees to keep up with routine tasks like bringing out forklifts to lower pallets that are stored on top of steel shelving before there is room on the floor.
And, in recent weeks, they’ve also had to deal with customers climbing those shelves in order to get bags of rice and ramen, risking injury to themselves and fellow shoppers. “I’m sure you’ve seen the photos,” she said.
And then there are those who try to game the system.
“We’ve had little old ladies fighting, people trying to change outfits and their appearance to come back through the line again, not knowing we’ve keyed our systems to limit them,” she added.
In its Q2 results, Costco acknowledged, “February sales benefited from an uptick in consumer demand. … We attribute this to concerns over the coronavirus, and estimate the positive impact on total and comparable sales to be approximately 3%.”
But the employee we spoke to said this uptick has been particularly harrowing for staff members, with some working 11-hour shifts and answering phones that never stop ringing with questions from customers “asking if we have the things they know we are out of.”
Employees have also had to shift to other roles in other departments when coworkers haven’t shown up—and it’s starting to take a toll.
“A guy in line [said] because I was so chatty, I was the reason his children would go without toilet paper, which we sold out of long before he showed up at Costco; he’s yelling, cursing at me on the way out,” she recalled. “Usually, I can let people roll off my back pretty easily, but with the nonstop stress lately, it’s been hard to take things in stride.”
Still, she said she and her coworkers are grateful for their paychecks given that so many in their community are being laid off. That said, they do have concerns, especially about their health.
“The biggest issue we are having at the warehouses is that we are being worked within an inch of our lives, and a lot of employees are generally worried about our exposure,” she said. “We handle a lot of cash and see all of humanity throughout our days. People are worried about bringing it home. Unfortunately, Costco is currently not offering any sort of benefit, except that should we call out, it’s not going to be punishable.”
In an email, a spokesperson for Costco acknowledged “the surge of interest in purchasing emergency supplies in response to COVID-19,” along with “measures to provide a safe shopping environment.”
However, the spokesperson, who declined to be named, also declined to respond to specific questions, saying, “Our focus is to have merchandise available for our members at low warehouse prices.” (This opinion piece in The New York Times noted that Costco has long offered paid sick leave as a standard benefit.)
In a perhaps overlooked announcement, Costco said last week it has acquired warehousing and delivery company Innovel Solutions for $1 billion from Transform Holdco, which is affiliated with hedge fund billionaire Eddie Lampert, who is now perhaps best known as the man who refuses to let Sears die.
According to Costco, Innovel has long provided last-mile delivery services for Sears, including installation and “white glove capabilities for big and bulky products” in the U.S. and Puerto Rico. While it’s too soon to tell, this could arguably point to Costco’s ambitions in ecommerce and delivering goods to customers at home.