*

Retailers like Levi and Costco plan to shift routes, use

air

freight to avoid delays

*

Newell Brands ( NWL ) offers to boost production to mitigate

supply

chain disruptions

*

Toy companies rely more on West Coast ports

*

Consumers engage in panic buying, fearing shortages and

price

hikes

(Adds comments from Gristedes in paragraph 19, 27 and Stew

Leonard's in paragraph 20)

By Savyata Mishra and Jessica DiNapoli

Oct 3 (Reuters) - Major U.S. retailers from Levi Strauss

to Costco are preparing alternative shipping

plans to ensure goods arrive in time for the peak holiday season

as an East Coast and Gulf Coast ports strike drags on.

Long lines of container ships queued up outside major U.S.

ports on Thursday as the biggest dockworker strike in nearly

half a century entered its third day, preventing unloading and

threatening shortages of everything from bananas to auto parts.

Retailers account for about half of all container shipping

volume, with Walmart ( WMT ), IKEA, and Home Depot ( HD ) among

those that heavily rely on the East Coast and Gulf Coast ports,

according to eMarketer analyst Sky Canaves.

According to bill of lading data from Import Yeti, a data

firm, some of the importers relying on affected ports range from

IKEA to Walmart ( WMT ) and Goodyear Tire & Rubber ( GT ).

Jeans maker Levi, which gets most of its products into the

United States through the East Coast from Asia, said it had made

alternate plans, such as shifting routes to the U.S. West Coast,

prioritizing certain ports and using air freight. As of November

2023, Levi had 1,172 company-operated stores in 37 countries,

with 412 stores in the Americas.

Levi is not alone in this strategy. Costco had contingency

plans in place including pre-shipping some products to get in

holiday goods early and preparing to use different ports, it

said last week.

Newell Brands ( NWL ), which makes cleaning equipment like

Rubbermaid mops, garbage cans and buckets, contacted retailers

like Walmart ( WMT ) and Lowe's this week offering to step up

production if necessary, said CEO Chris Peterson in an interview

on Wednesday.

Atlanta-based Newell manufactures most Rubbermaid products

domestically, while competitors may get held up at ports,

Peterson said.

He said the retailers "will let us know if they need us to

surge in and help." The manufacturer in the short-term could

boost production of some goods by 50%, Peterson said.

"We have safety stock built up," he said.

In the medium and longer term, the company could increase

capacity by about 20%, he added.

SUPPLY CHAIN CHALLENGES

Coffee is among the goods arriving to the United States

through the East Coast ports, with shipments already disrupted

and prices rising.

Folgers coffee maker J.M. Smucker said it had

strategies in place to address potential supply chain challenges

such as confirming the amount of inventory it already has

available to ship to retailers, adjusting production plans to

maximize manufacturing finished goods and evaluating re-routing

shipments to the West Coast.

"If the strike lingers, it will be difficult for retailers

to form a plan B without fear of being stuck with excess

inventory once the strike ends," said Michael Ashley Schulman,

chief investment officer at Running Point Capital Advisors.

"Depending on how long the strike lasts, many retailers and

auto lots may reduce holiday sales events because they won't

have enough goods available," he added.

Toy makers Mattel ( MAT ) and Hasbro ( HAS ) have limited

exposure as they get most of their supplies from China via the

West Coast ports, especially Los Angeles, said Linda Bolton

Weiser of D.A. Davidson.

Walmart ( WMT ), the world's largest retailer by sales, has

said it was prepared for unforeseen disruptions in its supply

chain and has maintained additional sources of supply to ensure

it has key products available.

Fearing shortages, some consumers have been buying extra

paper products such as toilet paper, paper towels, pasta and

frozen dinners, according to some local retailers. Most paper

products are manufactured domestically, however.

Upmarket grocery chain Gristedes witnessed some panic buying

of toilet paper and water bottles at some of its Manhattan

stores since the strike began. CEO John Catsimatidis said it was

now ensuring that these products are well stocked.

"We're already noticing that water sales doubled yesterday,

pasta sales doubled, frozen steaks doubled, frozen dinners

doubled," Stew Leonard Jr., the chief executive of New York

grocery chain Stew Leonard's, said on Thursday. "Sales of toilet

paper tripled."

Nakia, an associate at Target ( TGT ) in Manhattan who

declined to give her last name, said that she has noticed

shoppers picking up extra paper towels, tissues and canned food.

The store shelves were fully stocked.

When consumers expect prices to rise or goods to become

scarce they can behave in ways - like panic buying - that causes

prices to rise.

"What I am more worried about is how it impacts inflation

expectations," said Yelena Shulyatyeva, a senior economist with

BNP Paribas in New York. "It is very fresh in the memory - the

supply chain disruptions (during the COVID pandemic) and how

consumers look at it and how companies try to incorporate it."

Conagra Brands ( CAG ) CEO Sean Connolly said he expects the

company to be able to manage through any disruptions without any

significant impact as it had worked with suppliers in advance.

"A modest strike would not result in significant increases

in cost or in-transit times, as we've been pulling forward

volumes throughout the summer and we've received our holiday

inventory," a Tapestry spokesperson told Reuters.

Home Depot ( HD ) said it was closely assessing the situation,

similar to Nike ( NKE ), which also said the strikes were a

possible risk. Birkenstock ( BIRK ) declined to comment while

Best Buy ( BBY ), Target ( TGT ) and the dollar chains did not

immediately respond to requests for comment.

"It doesn't look like things are promising at the East Coast

(ports)... We are planning for the worst," Gristedes'

Catsimatidis said.