Dive Brief:
- O’Reilly Automotive is bolstering its distribution network to support store growth and increased demand in core markets, Brent Kirby, co-president, said during a Q4 earnings call in February.
- The company is in the process of relocating distribution centers in Springfield, Missouri, and Atlanta, Georgia, to larger facilities, which were announced earlier in Q3.
- O’Reilly is also building a new 530,000-square-foot facility in Stafford, Virginia, which is expected to be operational by mid-2025 to support untapped markets.
Dive Insight:
O’Reilly aims to take advantage of opportunities in the upper mid-Atlantic, which the company views as a “big, untapped geography,” CEO Brad Beckham said in Q3.
He added that there is “strength” behind where the distribution centers are located. “Our DCs are where the cars are, where the people are, and we don’t see that as an opportunity necessarily to use 3PLs,” the CEO explained. “We want to own that, we want to run it, we want to operate it the way we always have.”
The anticipated Stafford distribution site will service the Washington D.C., Maryland and Virginia corridor, Kirby said in Q3. The site is expected to provide enough capacity to service 350 stores.
Meanwhile, O’Reilly’s 690,000-square-foot Atlanta distribution center seeks to expand store servicing efficiency and provide direct import processing capabilities to increase the number of stores the company can support by 100, the co-president said.
“Both of these projects are on track,” Kirby said in February. “We're projecting the Springfield relocation to be complete in the back half of 2024, and we'll begin the process of transferring stores to the new Atlanta facility at the end of this year.”
The company also aims to enhance the next level of its “tiered supply chain model” by investing in its hub store network. These “strategically located” hub stores can bounce SKUs to smaller stores that need them, according to the Q3 call.
“This strategy has been an important aspect of our supply chain for many years and begins with placing distribution centers in large metro areas to provide same-day availability to a wide range of SKUs for our customers,” Kirby said.
