In an interview on CNBC, International Paper (NYSE:IP) CEO Mark Sutton attempted to reassure panicky Americans. While supply may be dwindling on the shelves of your local retail outlet, there's still plenty of toilet paper and diapers to go around, he said. And Sutton should know. Not only does his company make the raw materials used in toilet-paper manufacturing, he's also on the board of directors at Kroger (NYSE:KR), where toiletry products are sold to the end consumer nationwide.
As COVID-19 continues to spread, people have started quarantining in their homes. In an effort to be prepared for a lengthy quarantine, many began hoarding essential items -- such as TP -- leading to fears of a toilet-paper shortage.
The toilet paper economy
As shoppers rush to stock their homes with consumer staples, many retailers have opted to limit the sale of certain items. Walgreens (NASDAQ:WBA), for example, is limiting the purchase of disinfectant wipes. Kroger has limits on cold medicine. And Walmart (NYSE:WMT) is placing limits on paper products and baby diapers. These limits give everyone the opportunity to purchase what they need -- including those who need it most.
As Sutton communicated, the issue is not one of supply. The problem is that current consumer demand is outpacing the speed of distribution. In other words, there's plenty of toilet paper and other essential items to go around. It just hasn't had time to make it from warehouses to stores yet. Retailers are working overtime to remedy this, and in some cases are even hiring new workers. Walmart, for example, currently needs 150,000 temporary workers to meet surging demand.
So if you're running low, try to stay calm. More TP is on the way.