re: When will stores be restocked?

It’s starting now. I was at Walmart a few minutes ago and the shelves are starting to restock. Here’s some context for those not in the consumer packaged goods industry:

Most products go warehouse direct which means the manufacturer delivers the product to the retailers distribution center and then the retailer is responsible for delivering the product to the individual store and store employees put the product on the shelf.

The other way that products typically get into the store is called DSD or direct store delivery. In these situations, manufacturers produce the product and send the product to their own distribution centers. They then service stores directly by driving trucks to the store, dropping off product, and have merchandisers that out the product on the shelves. This is most common for products that sell very quickly, namely, beverages and chips. These companies are in the stores multiple times a week so they can quickly respond to changes in demand and reorder product in larger quantities for the next visit.

So...all of this leads me to why the shelves are bare right now. The vast majority of products are warehouse direct so there is only so much product that sits in the store or the back room waiting for store employees to put it on the shelves. Additionally, it takes time for the retailer distribution centers to get product into the stores where demand has peaked. Lastly, it takes time for the manufacturers to produce more product to meet the demand and get that product to the retailer distribution centers.

The general rule of thumb for warehouse direct products is that it takes two weeks to get across the country from the manufacturer plant to the retailer distribution center. Then, it takes two weeks for the retailer to get that product to all of its stores....which starts explaining why the shelves are bare, especially on paper products.

We are about three weeks since demand spiked which completely depleted both the in store supply as well as everything the distribution centers housed. The manufacturers then went into overdrive to produce more product but they don’t have a fast way to get it to the shelves...hence the outages across most stores on everything from paper towels to spaghetti sauce.

Whereas, the beverages aisle is generally pretty well stocked because Coke, Pepsi, Dr Pepper have labor in the stores constantly to refill the product. They can respond to the surge in demand much more rapidly than WD manufacturers. Their constraints are more around supply chain being able to produce enough product to meet what the market demands. Production lines can only run so fast and raw materials can only be procured so quickly...so even those companies will have limited assortment of products (but will almost always have product available).

Hope that is helpful and gives some color in why some shelves are empty and others are not.