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Bed Bath & Beyond Inc. To Be Affected By West Coast Port Disturbance

|Includes: Bed Bath & Beyond Inc. (BBBY)

Due to steady recovery in United States housing market and continuous consumer affordability improvement, Bed Bath & Beyond Inc.(NASDAQ:BBBY) has taken an advantage of the situation. Company share is up by almost 35% from July 2014 because of gradual increase in its sales.

The brand is widely known as being a specialist retailer, they provides high quality of extensive home furnishing and kitchen and bath related products, which are difficult to find at other stores. This is company's distinctive selling point from the beginning; it has benefited the company to establish a niche image in market controlled by Wal-Mart and other stores selling home furnishing items. Though, the company sales may weaken because of the West Coast Port disturbance. The West Coast port is causing interruption in the attainment of inventory.

Fabrics and various other goods imports are failing to reach retailer on a specified time. Which is producing a fleeting shortage at the company's warehouses, whereas, sometimes the company is not even getting the import goods. However, it is not clear that the home furnish retailers is concern about the shipments delay. Company's regular customers facing trouble on its website as the required products are out of stock. With all this happening at once, Bed Bath & Beyond can have a negative influence on customer loyalty.

The issue with West Coast port is its increasing imports, which has caused traffic jams that are the main reason for the overall delay in the movement. Besides all this, labor turbulence is making things worse. The labor dispute is because of the illegal Dockers and longshoremen, who have been working on the shore without the contract since 2014 July. On numerous times, the West port has been closed down completely, as the Warehouse Union and Longshore strike back Pacific Maritime Association representing shippers.

PMA spokesman said that the terminal that accommodates minimum 25 to 30 moves in an hour are now seeing less than 10 moves. The prolonged clash between PMA and ILWU is intimidating a gridlock at various ports. Both the parties' negotiations have reached a dead end and seem like there is no resolve. Because of the increasing dispute, many of the retailers have started ordering inventories in buffer, which is causing more congestion.

Kurt Salmon said that because of the traffic crowding at West Coast Port, retailers can lose as much as $7 billion this year.

The company stocks were at $76.06 on Thurday, at closing bell.