Walking through Walmart last week, I noticed something that gave me an uncomfortable twinge of déjà vu—gaps on shelves where products should be. Nothing apocalyptic yet, but enough to make me wonder if we're heading for another round of retail musical chairs where consumers scramble for essentials.
Are we staring down another supply chain meltdown? And if so, who wins when the music stops?
The chatter about inventory issues has been building. Not pandemic-level dramatic—not yet anyway—but worrying enough to make me dig into what happens if we do face another significant period of product scarcity. Particularly, I wanted to understand how it might shake out for retail behemoth Walmart and those ubiquitous dollar store chains that seem to multiply like rabbits in America's strip malls.
What I discovered is that our 2020 empty-shelf nightmare taught us something fascinating: scarcity doesn't hit all retailers equally. Not by a long shot.
The Retail Food Chain
Having covered retail for nearly a decade, I've come to think about supply chain resilience as a three-tier system—a kind of retail hierarchy that determines who gets products when things get tight.
Sitting at the top of this pyramid? Walmart. With its astronomical $600 billion in annual revenue, the Arkansas giant possesses what I call "supply chain gravitational pull." It's simple physics, really. When you're that massive, suppliers orbit around you.
The middle tier includes your Targets, regional grocery chains, and similar operations—substantial businesses, sure, but they lack Walmart's sheer mass advantage.
Then there's the dollar store universe—Dollar General, Dollar Tree, Family Dollar. These guys operate with a fundamentally different playbook. They're retail opportunists (and I mean that as a compliment) who've built empires around flexibility rather than consistency.
When supply chains start creaking, these tiers respond in ways that are both predictable and, honestly, pretty fascinating.
Walmart: The 800-Pound Gorilla
Look, it's just basic business logic. If you manufacture consumer goods and suddenly can't meet all your orders, who gets priority? Your biggest customer. Full stop.
I spoke with three former consumer packaged goods executives last month who all confirmed the same thing: Walmart leverages its position ruthlessly when supplies get tight. One former VP at a major household products company told me, "When we had to allocate inventory during COVID, the conversation wasn't if Walmart would get their shipments, but how much of everyone else's allocation they'd take."
During the last supply crunch, this advantage played out dramatically. Sure, Walmart had empty shelves too—I saw them myself in stores across four states while reporting—but they recovered faster than most. Their massive distribution infrastructure (more than 210 distribution centers nationwide) lets them shuffle inventory like a Vegas dealer when shortages hit specific regions.
There's also what I've termed the "consumer congregation effect." When people can't find stuff at their neighborhood shops, they assume—often correctly—that Walmart will have it. This creates a self-reinforcing cycle; Walmart gets even more customer traffic, which further cements their supplier importance.
Since 2020, Walmart hasn't been sitting pretty either. They've doubled down on supply chain investments—expanding their private truck fleet and building sophisticated inventory management systems. This isn't charity work; it's competitive advantage-building that would make Sun Tzu proud.
Dollar Stores: The Cockroaches of Retail (Complimentary)
Dollar stores present an entirely different approach to survival, and it's fascinating.
I toured a Dollar General distribution center in Oklahoma in 2021, and what struck me wasn't their scale but their nimbleness. Unlike Walmart's methodical consistency, dollar stores have perfected the art of the quick pivot.
Can't get Tide? They'll fill the shelf with Sun detergent instead. Name brands suddenly unavailable? Private label to the rescue. This adaptability makes them surprisingly resilient during disruptions.
They also benefit from what retail analysts rather pretentiously call "treasure hunt psychology." (I've always thought that term was a bit much, but it fits.) Shoppers at dollar stores don't necessarily expect product consistency—finding unexpected items is part of the experience. When supply chain issues hit, this built-in expectation buffer serves as emotional insulation against disappointment.
Then there's geography. Dollar General has aggressively expanded into rural America—places where Walmart won't bother going. During transportation disruptions, these stores' proximity to underserved markets becomes even more valuable.
A store manager in rural Georgia put it bluntly to me: "When roads get bad or gas gets expensive, people still need toilet paper, and they're not driving 30 miles to Walmart to get it."
The Inflation Factor
Any new wave of empty shelves would arrive in a completely different economic context than 2020. Inflation has dramatically reshaped consumer behavior, driving significant traffic to both Walmart and dollar stores as Americans hunt for value like never before.
I've watched dollar stores' customer base expand well beyond their traditional demographic. Even in affluent suburbs, dollar stores are now packed with BMW-driving shoppers hunting bargains. Dollar Tree CEO Rick Dreiling recently called this "the best environment for value retailing" he's seen in his career—and the guy's not exactly new to the game.
Meanwhile, Walmart has leaned hard into its "everyday low price" positioning, snatching grocery market share from higher-priced competitors like it's going out of style. Their marketing has hammered price rollbacks specifically targeting inflation-sensitive categories.
A new period of scarcity would almost certainly accelerate both these trends. As products become harder to find, price sensitivity intensifies for most consumers, benefiting retailers with the most bang-for-buck reputation.
So Who Wins?
If shelves start emptying again significantly (God help us all), I'd expect both Walmart and dollar stores to emerge stronger than the broader retail sector—but for entirely different reasons.
Walmart wins through brute-force supplier leverage, logistical muscle, and becoming consumers' default "they probably have it" destination.
Dollar stores win through their cockroach-like adaptability (again, a compliment!), geographical spread, and their comfort with inventory inconsistency.
The retailers caught in the middle—lacking either Walmart's scale or dollar stores' flexibility—are the ones who'll likely struggle most. That regional grocery chain you grew up with? They might be in trouble.
For investors watching retail stocks, this suggests that not all empty shelf exposure is created equal. The strongest players have actually built business models that transform supply chain disruption from existential threat into opportunity.
And for shoppers... well, maybe keep some extra toilet paper in the closet. Just saying.
