By Sharon Terlep and Sarah Nassauer 

Procter & Gamble Co. didn't make enough dish soap, and Walmart Inc. is letting all its customers know about it.

P&G, which makes Dawn and Gain dish soap, told retailers in recent weeks that they couldn't make enough hand dishwashing soap, and that some varieties may be in short supply for a time. In response, Walmart, the country's largest retailer, posted signs in many of its stores warning customers of a "national supply shortage."

The signs sparked a mix of concern and confusion. Some customers posted photos on social media showing the warning signs taped to shelves that were fully stocked. "Is Walmart making this up or is there really a national dish soap shortage?" asked one account on Twitter.

Adding to the confusion, some rival retailers announced they had plenty of soap. P&G wasn't pleased, as some at the company worried the warnings could exacerbate the problem by causing a run on the product, according to people familiar with the matter.

"There is a national dish soap shortage, so the signs are up for customer awareness," said a Walmart spokeswoman. The signs say shoppers should expect shortages through Dec. 1.

There is little indication that Walmart's rivals are experiencing a disruption. "We have no reason to believe that our dish soap inventory will be impacted by any vendor-related issues," said Joshua Thomas, spokesman for Target Corp. Several grocery chains, including Michigan-based Meijer Inc. and Pennsylvania-based Giant Food Stores, said they aren't experiencing a shortage. CVS Health Corp. said it "is currently meeting demand" for Dawn.

Walmart and other retailers occasionally post signs in store aisles telling customers about product shortages, but at Walmart it is usually used to explain bare shelves to shoppers or when a shortage is significant, said current and former executives from consumer goods companies and Walmart. Wet weather during the growing season led to a canned vegetable shortage this summer, prompting Walmart to post signs for shoppers on sparse shelves.

The signs at Walmart were posted in stores across the country, often in front of generally full shelves, according to photo and survey data from Field Agent Inc., a Fayetteville, Ark.-based company that enlists shoppers to collect photos of store conditions. Some stores were noticeably short on Dawn and Gain.

Any hiccup in P&G's dish soap supply could disproportionately hit Walmart. Walmart is a larger seller of P&G products than any other retailer, accounting for 15% of the consumer goods company's total sales last year, according to financial filings. At the same time, Walmart often operates with lower inventory on hand than competitors to more efficiently run its supply chain, said current and former executives from consumer goods companies and Walmart. When there is a supply snafu it could cause a larger ripple effect at Walmart.

Handwashing dish soap is a $1.6 billion industry in the U.S. and is dominated by P&G, which controls close to 60% of the market with its Dawn, Gain and Ivory brand soaps.

P&G, calling the issue a "short-term inconvenience," said the supply snafu is resolved and that all soap varieties should be available soon. A P&G spokesman said the company wasn't involved in the decision to put up the signs and didn't specify when the company expects supply to return to regular levels.

"We are aware that some P&G hand dish products may be harder to find right now," the spokesman said in a statement. "For a brief period, demand exceeded what we were able to supply, but this was temporary."

P&G makes most its dish soap at a 114-year-old factory in Kansas City, Kan., which is slated to close next year when the company moves soap production to a massive new plant in Tabler Station, W.Va. The spokesman declined to elaborate on what prevented P&G from producing enough soap.

On Twitter, some shoppers joked they would make alternative dish plans. "Soooo...paper plates and plastic utensils until December?" one wrote.

Jaewon Kang contributed to this article.

Write to Sharon Terlep at sharon.terlep@wsj.com and Sarah Nassauer at sarah.nassauer@wsj.com

 

(END) Dow Jones Newswires

October 26, 2019 07:44 ET (11:44 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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