Papco, a major domestic manufacturer of tissue paper and various personal hygine products, has cut it's workforce due to a drop in toilet paper sales after the arrival of US retailing giant Costco. Paco's sales have dropped by 20-30% after Costco opened it's store in May.
Read more: Costco-effect: Locally grown strawberries rot in greenhouses as imports flood market
The workforce of Papco, which is the only domestic manufacturer of toilet paper, has been cut by six people to meet the drastic drop in sales. After the layoffs the company employs 35 people in it's factories. The manager of Papco told the local newspaper Fréttablaðið that the company was unable to compete with Costco, which it accused of selling toilet paper at below cost.
The worst thing about this is that Costco is selling goods at prices which are below cost. That's something we can't compete with, as we have to buy our raw materials, the paper, at world market prices.
He pointed out that Costco Iceland was selling it's Kirkland toilet paper at prices which were significantly below it's retail price in England.
Other domestic manufacturers of cleaning and toilet products who spoke to Fréttablaðið said that they had not seen a significant drop in sales or that they didn't expect the effects of Costco's arrival to be long-lasting. Packaging sizes sold at Costco are not particularly convenient for consumers, who then return to us, one told Fréttablaðið.
Papco, a major domestic manufacturer of tissue paper and various personal hygine products, has cut it's workforce due to a drop in toilet paper sales after the arrival of US retailing giant Costco. Paco's sales have dropped by 20-30% after Costco opened it's store in May.
Read more: Costco-effect: Locally grown strawberries rot in greenhouses as imports flood market
The workforce of Papco, which is the only domestic manufacturer of toilet paper, has been cut by six people to meet the drastic drop in sales. After the layoffs the company employs 35 people in it's factories. The manager of Papco told the local newspaper Fréttablaðið that the company was unable to compete with Costco, which it accused of selling toilet paper at below cost.
The worst thing about this is that Costco is selling goods at prices which are below cost. That's something we can't compete with, as we have to buy our raw materials, the paper, at world market prices.
He pointed out that Costco Iceland was selling it's Kirkland toilet paper at prices which were significantly below it's retail price in England.
Other domestic manufacturers of cleaning and toilet products who spoke to Fréttablaðið said that they had not seen a significant drop in sales or that they didn't expect the effects of Costco's arrival to be long-lasting. Packaging sizes sold at Costco are not particularly convenient for consumers, who then return to us, one told Fréttablaðið.
