It is well known in the supermarket industry that how items are placed

Hi Hoozan, thanks for tagging me on this.

Would request you to go thru this post on the repetition of "that".

A that is usually repeated when GMAT believes that there would be some ambiguity in the sentence, if that were not repeated.

For example:

Peter said that his sister is a bad driver but his brother is a good driver.

There could be following two interpretations of the above sentence:

Interepreation-1:

Peter said that:
i) His sister is a bad driver but
ii) his brother is a good driver

In other words, Peter said two things: i) His sister is a bad driver and ii) his brother is a good driver

Interepreation-2:

i) Peter said that his sister is a bad driver but
ii) his brother is a good driver

In other words, the sentence is stating two things: i) Peter said that his sister is a bad driver and ii) his brother is a good driver

Since the above two interpretations are possible, GMAT would most likely fix this ambiguity, by either stating:

i) Peter said that his sister is a bad driver but that his brother is a good driver.
- Notice that the repetition of a that (after but) makes the second that parallel to the first that. Hence, the above sentence can only have Interepreation-1.

Or

ii) Peter said that his sister is a bad driver, but his brother is a good driver.
- Notice that the above sentence uses a comma before the coordinating conjunction but. In such cases, but generally connects two Independent clauses and so, the above sentence can only have Interepreation-2.

In option E of the current sentence under consideration (It is well known in the supermarket industry...), the very distinctive structure of the sentence on RHS of the parallelism indicator and (how frequently...) makes it very evident that the only similar parallel structure on the LHS of the parallelism indicator and is how items.. Hence, the sentence does not need to repeat the that, to establish this parallelism.