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From: Jon Koplik3/16/2020 11:00:38 PM
   of 67
 
WSJ -- Relax, America: The U.S. Has Plenty of Toilet Paper ................................................

March 16, 2020

Relax, America: The U.S. Has Plenty of Toilet Paper

Factories are flush with bathroom tissue, but large manufacturers say the problem is getting it to stores

By Sharon Terlep

America can spare a square.

Jittery shoppers across the country are clearing shelves of bathroom tissue as coronavirus keeps people home and threatens to force more Americans into quarantine. But toilet paper­ -- unlike some other high-demand items such as hand sanitizer and face masks -- ­remains plentiful, according to the two biggest manufacturers.

Charmin maker Procter & Gamble Co. and Cottonelle maker Kimberly-Clark Corp. say they have ramped up toilet-paper production and are able to make enough to meet demand. Kimberly-Clark has started posting pictures of warehouses full of toilet paper in some markets. The problem, the manufacturers say, is getting the product shipped to warehouses and retailers, and then onto store shelves, quickly enough to keep up with sales.

The shopping frenzy stirs memories for some of the global financial crisis, which disrupted the market for, among other things, short-term corporate debt.

“This is literally 2008 played out over toilet paper and not commercial paper,” said Justin Wolfers, a University of Michigan professor of economics and public policy. “As long as I believe you are going to run to Costco and buy toilet paper, I’m going to run. And as long as you believe that I am going to run, you are going to run. Both are rational.”

People are buying extra toilet paper as a safeguard and not using a dramatically larger amount, which distinguishes bathroom tissue from face masks, sanitizer and other cleaners that are being consumed in far greater quantities.

U.S. toilet-paper sales were up 60% for the week ended March 7, compared with the same period a year ago, according to Nielsen. It is a significant jump, but not close to the sales increases for hand sanitizer or aerosol disinfectants, up 470% and 313%, respectively, for that period.

Restocking inventory can take several hours or days as goods work their way from the factory to the warehouse to shelves. The consumer-products industry, including suppliers, manufacturers and retailers, have overhauled supply chains over the past two decades to be more profitable and flexible by keeping limited inventory on hand as opposed to stocked up in warehouses. The more cost-effective system means that when demand spikes unexpectedly, supplies run short.

Toilet paper is relatively easy to make. It is produced in the U.S., involves few materials and doesn’t require parts imported for packaging. U.S. industry sales were roughly $9 billion last year, according to Nielsen.

Kimberly-Clark said it has plans in place to meet increased demand for its products, including faster production and “reallocating inventory.”

A P&G spokesman said toilet-paper shortages are sporadic and generally temporary. He noted that on any given day in P&G’s hometown of Cincinnati, there are stores with plenty of toilet paper and stores completely sold out.

“We have seen some temporary out-of-stocks at some retailers given rapid consumer purchases,” he said. “However we continue to manufacture and ship products to retailers nationwide.”

Sales of toilet paper and other non-perishable, non-consumable goods will likely slow down considerably for a while after the coronavirus situation stabilizes, said Bill Simon, former CEO of Walmart U.S. The purchase frequency for items such as toilet paper is consistent and predictable, he said.

“You don’t use more toilet paper because you have it,” he said. “If you bought three bags of Doritos, you’ll eat them.”

-- Sarah Nassauer contributed to this article.

Write to Sharon Terlep at sharon.terlep@wsj.com

Copyright © 2020 Dow Jones & Company, Inc.

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