(Bloomberg) -- Costco Wholesale Corp.'s first outlet in China opened on Tuesday and was soon overrun with customers willing to fight over discounted products and wait hours to pay for their purchases.
The American retail giant had to suspend operations in its Shanghai store in the afternoon citing “heavy traffic and customer flows,” according to a text message sent by the company to consumers holding its membership card. The message was shared on Weibo, China's micro-blogging website.
The frenzy at Costco's store comes at a time when the U.S. and China are locked in a tit-for-tat tariff war that shows no signs of abating and is making American firms wary of investing in the largest Asian economy. Costco is also entering a market where many of its global rivals have struggled and given up. Carrefour SA sold an 80% stake in its China unit at a discount in June while German wholesaler Metro AG is looking to sell its operations.
Costco's shares rose 5% to a record high in the U.S. on Tuesday, while the broader gauge S&P 500 declined. The stock has climbed 44% this year.
“There's no other word to describe Shanghai's Costco but crazy,” said a Weibo user, who gave up on the shopping plan after seeing two-hour queues at the checkout counters. Other Weibo users shared that they had to wait three hours to enter the parking lot while some decided to walk to the store to avoid the traffic jam.
Other pictures showed customers grabbing packets of roast chicken and elbowing out other shoppers at the store. Local news reports said the retailer offered discounts as deep as 60% on some products and annual membership for just 199 yuan ($28). The sale also includes the nation's coveted fiery liquor drink from Kweichow Moutai Co. and Wuliangye Yibin Co.
Costco didn't immediately answer phone calls and an online inquiry seeking comments on Tuesday's shopping frenzy.
To contact Bloomberg News staff for this story: Jinshan Hong in Hong Kong at jhong214@bloomberg.net;Wendy Hu in Beijing at whu109@bloomberg.net
To contact the editors responsible for this story: Rachel Chang at wchang98@bloomberg.net, Bhuma Shrivastava, Jonathan Roeder
©2019 Bloomberg L.P.
With assistance from Bloomberg
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