Walmart Sparks Panic and Confusion in the Dish-Soap Aisle -- Update
October 27 2019 - 5:11PM
Dow Jones News
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 might 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 said 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, a Target Corp. spokesman. 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 of 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 new plant in West Virginia. 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 27, 2019 16:56 ET (20:56 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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