Advance Auto Parts cut 38 DCs to 16 and built a market-hub layer for same-day parts
Advance merged duplicate networks into 16 DCs feeding 35 market hubs (60 by 2027), each stocking ~80,000 SKUs for same-day parts at 60-90 stores.
What was changed
Advance Auto Parts had spent years streamlining a supply chain that still carried two distinct distribution networks — its own and the one that came with the Carquest acquisition. Since year-end 2023 the retailer has consolidated its US footprint from 38 distribution centers to 16, merging everything into a single operation where DCs act as replenishment nodes feeding a new layer of market hubs located closer to stores.
The market hubs are the service mechanism: each holds roughly 75,000-85,000 SKUs within a radius supporting 60 to 90 stores, driving same-day availability of hard parts. Several smaller distribution centers were converted directly into hubs. As of the May 21, 2026 earnings call, Advance operated 35 hubs and was on track to open 10-15 more this year, targeting 60 by 2027.
With the consolidation 'nearing the finish line', CEO Shane O'Kelly said the focus has shifted to standardising operations: workflow reviews produced improvements rolling out through the year, with 'near perfect shipment accuracy' as a critical objective — high enough that stores would no longer need to manually scan each product on receipt, saving labor. The company is also optimising fragmented vendor ordering to cut handling costs, streamlining transportation and reducing backroom congestion to lower cost per unit shipped.
The competitive backdrop is moving the same way: AutoZone has been building out its own 'mega hub' network for faster store fulfillment, with its CFO saying the chain is targeting nearly 300 mega hubs in the near term.
Why it worked
Carquest left Advance running two parallel distribution networks — pure redundancy to strip out.
Converting small DCs into market hubs repurposed assets instead of just closing them.
Pushing 75,000-85,000 SKUs within a 60-90 store radius is a concrete mechanism for same-day availability, not a slogan.
The near-perfect-accuracy target ties supply chain quality directly to store labor savings.
Vendor-order consolidation attacks handling costs on both sides of the dock.
What can be applied
Two networks from an acquisition are one too many: consolidate the backbone, then push inventory into local hubs — speed comes from where the SKUs sit, not how many buildings you run.
Aftermath
As of June 2026 the network rebuild is near complete (16 DCs, 35 hubs), with standardisation, process rollouts and 10-15 more hub openings through 2026 on the way to 60 hubs by 2027. AutoZone's parallel mega-hub build-out (targeting ~300) keeps same-day coverage the battleground in US auto parts.