With COVID-19 and its variants still raging, it’s possible the industry could face another rush of PPE sales — though it’s too soon to tell.
If demand does again spike, companies are better prepared, but supply chain congestion could rear its head.
The dip in PPE sales has been between 70% and 90% “from the peak demand that we had last year. This includes masks and gloves. All the other ancillary things that we had — thermometers and sanitizer and some other things — are more easily procured from specialists in that area. But we have yet to see another surge in any of the COVID-related products.”
Take Grainger. On the Chicago-based distribution giant’s last earnings call, CFO Deidra Cheeks Merriwether said the company saw “decreased demand for PPE products” but those products are still outpacing pre-pandemic sales.
Fastenal is another company that’s seen its PPE fortunes rise and fall. During the peak of the pandemic, sales of those products skyrocketed. In the second quarter of 2021, along with a slowdown in cases came a slowdown in PPE sales. “Lower-margin COVID-affected PPE mix retreated to pre-pandemic levels,
Lawson Products is another publicly traded MRO, “So our PPE sales were actually higher earlier in the year. An exception is nitrile gloves. We continue to supply health care clients of course, but as food service, automotive collision repair, janitorial services and general industry ramp back up, we’re delivering the nitrile gloves they need too, often at discounted prices
Any discussion of PPE supply and demand must include the topic that’s stymied all industries: supply chain congestion.
However, how is this for cause and effect – because of the computer chip shortage, there are far less new car sales. This means there is a increased need for automotive technicians to repair the vehicles currently on the road. Automotive and industrial customers could find and hire more repair technicians their production activity and consumption of consumable parts would increase. With the shortage of new car inventory, there is definitely a need for automotive technicians to repair the vehicles currently on the road.”
There are other levers being pulled by macroeconomic trends, making it clear that the PPE craze of last summer might never be repeated.
Moreover, mask mandates being reinstated — at businesses, in municipalities, etc. — most people have their own PPE supply now, and many companies have stockpiles of N95 and KN95 masks, perhaps even some face shields.
In other words, the likelihood of a rush on PPE ordering has decreased. If there is one, it probably won’t be as frenzied. One, the utility closets are probably filled with far more masks than a year and a half ago. Two, the stress level and the reactionary spectrum are a little bit different because people have been dealing with COVID now for a long time. The propensity to overreact, has clearly subsided.
October 15, 2021
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Douglas Stein | PPE Advantage
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