World News

Target says shoppers stocking up on essentials over coronavirus fears

(Reuters) – Target Corp <TGT.N> said on Tuesday it was seeing a surge in store traffic in the United States as people stockpile disinfectants and food amid the coronavirus outbreak.

“We’ve certainly seen a U.S. consumer that’s starting to stock up on household essentials, disinfectants, food and beverage items, all those staple items that the CDC has recommended,” Target Chief Executive Officer Brian Cornell said on a post-earnings call.

Stockpiling in some states has been spurred by messages from state health departments urging residents to buy supplies of non-perishable foods, prescription medications and sanitary supplies.

The advice contradicted the message from the U.S. Centers for Disease Control and Prevention (CDC). The agency’s director Robert Redfield told a U.S. congressional hearing on Thursday that there was no need for healthy Americans to stock up on supplies.

While fears of the outbreak turning into a global pandemic are on the rise, with even the U.S. Federal Reserve cutting interest rates in an emergency move, some companies such as Clorox Co <CLX.N>, a supplier of bleach and other cleaning products, are expected to benefit from the increased demand.

Investors have also bet on tissue maker Kimberly-Clark Corp <KMB.N> and food suppliers such as Hormel Foods Corp <HRL.N> and Campbell Soup Co <CPB.N> in the event consumers have to prepare to stay at home.

There are more than 90,000 confirmed cases of coronavirus globally. In the United States, the virus is now believed to be present in at least four communities in the Pacific Northwest.

The epidemic has killed over 3,000 people, including six in the United States.

Several major retailers — including Walmart Inc <WMT.N> and Target — stand to see supply chains badly hit by the virus outbreak and could result in some empty store shelves starting in April, Ed Kelly, an analyst at Wells Fargo Securities, wrote in a research note last month.

“We believe the time to start worrying about the supply chain risk of 2019-nCoV is here,” wrote Kelly. “It’s worth noting that big box players like Target and Walmart could be the first to experience out of stock issues.”

(Reporting by Uday Sampath in Bengaluru; Editing by Arun Koyyur and Shounak Dasgupta)