Supply chain stressed due to coronavirus
Dollar Tree CEO Gary Philbin said Wednesday the retailer’s supply chains have “been stressed” from a spike in coronavirus-related demand, but he sought to reassure customers that more products are on their way.
“As our trucks show up to stores we probably have enough for a day or a day and a half, but more is coming,” Philbin said on CNBC’s “Squawk on the Street.” “We’ve called out, and we have $1 billion in the pipeline somewhere.”
Employees at Dollar Tree’s 24 distribution centers in the country have been working seven days a week to send shipments to stores, Philbin said. Dollar Tree, which also owns Family Dollar, has about 15,000 stores in the U.S. and Canada.
“Our vendor partners have ramped up. It’s coming. It’s just that it’s not going to be enough for the next few weeks, but there is enough coming overall,” Philbin said. “The levels on shelves are going to get better and better as we go through this.”
Philbin also said Dollar Tree is looking to hire around 25,000 employees across its stores and distribution centers.
“We operate often times in these neighborhoods that have had a loss of jobs. Waiters, hotels. We are seeing some of those folks show,” he said.
Philbin said he understands that customers may be concerned about having enough access to essentials such as paper towels, hand sanitizer and cleaning supplies. He said he was in a store last week and there was a shopper who “seemed to be a bit in a panic.”
“Our store manager said, ‘Listen, we have two that you can take today and we have more coming next week on the truck,'” Philbin said. “Just that conversation reduced the angst of that particular customer.”
Shares of Chesapeake, Virginia-based Dollar Tree were slightly higher Wednesday, even as the broader market was down around 3%. Dollar Tree’s stock is down around 22% so far this year. But it has risen more than 20% from its March 18 low of $60.20 per share. It was trading around $73 intraday Wednesday.
Top analyst Matthew Boss recently said Dollar Tree and other discount retailers could emerge stronger from the coronavirus pandemic if the U.S. exits to a “recessionary backdrop.”
“Discounters, dollar stores, off-pricers and strong global brands I actually think could emerge stronger from this, take market share, use their size and scale,” the JPMorgan analyst told CNBC last week.