This is a pretty common mechanism in several markets. I worked in the big paint store chain in the US and the local setup was a lot like this. Every store had as much stock as they can physically hold, and no two have the same capacity. It was a daily occurrence to shuttle stock to and from nearby locations, and very common for a small store to have a nearby large store order and hold stock for a job too big for the origin store to handle.

We also had commercial stores spread out which were in essence local warehouses. Those stores spent a large part of their time handling stock transfers. They held specialty products small stores rarely need and couldn't justify the minimum order quantity.

It's a lot more efficient and much faster than having product shipped across the country.