Shoppers rushed to Costco to stock up on food and other essential supplies over the weekend amid fears related to the coronavirus outbreak, prompting a spike in the company’s shares in trading Monday.
Social media users around the country shared images of packed Costco stores and empty shelves as the deadly virus continued its spread. More than 89,000 people were infected and more than 3,000 people had died from coronavirus as of Monday afternoon, including six deaths in the U.S.
Costco shares rose more than 7 percent in trading Monday. Shares are on pace for their largest single-day spike since Sept. 3, 2009.
Investment firm Oppenheimer said it expects Costco to experience “material comp benefits” as shoppers buy supplies. However, analyst Rupesh Parikh warned the trend could lead to slower demand at Costco stores in the future.
“Over the weekend, we spent time at the Wayne, NJ, Costco," Parikh wrote in a note to investors. "Consistent with other media reports, we observed significant increases in traffic vs. a typical weekend day. “Per our conversations with store employees/management, the pickup in traffic started on Thursday and continued at least through Saturday.”
The shopping surge put food staples and cleaning supplies in high demand, with some products going out of stock. Oppenheimer said nonperishable food items, such as rice and pasta, as well as home care products, such as paper towels and disinfectant spray, were especially popular.
Non-essential items, such as electronics, saw comparatively low demand at stores.
Shares of fellow big-box retailer Walmart also rose.
The Dow Jones Industrial Average rebounded on Monday, rising more than 500 points following sustained losses last week. The stock market index previously entered correction territory as coronavirus spooked investors.