Grainger Seeing 'Benefits' of Pricing Changes - Modern Distribution Management

Log In

Grainger Seeing ‘Benefits’ of Pricing Changes

CEO: Pricing moves not demand environment primary driver of 2017 sales growth.

The strong demand environment was a “meaningful part” of Grainger’s 2.8 percent sales increase in 2017 but not the majority of it, according to CEO DG Macpherson, who said the company’s “own pricing and marketing actions” drove last year’s growth.

“Certainly there are some demand tailwinds, which are great, but lot of this is just the changes we’ve made,” Macpherson said on last week’s earnings call with analysts. “We are now starting to see the benefits of that work.”

The company’s sales improved to $10.4 billion in 2017, though profit decreased 3.3 percent to $585.7 million. For the fourth quarter, sales increased 6.5 percent to $2.6 billion, while profit jumped to $151.1 million from $60.7 million the same quarter a year ago.

Much of the questioning for Macpherson and other Grainger execs on last week’s call centered on the company’s significant changes to its pricing structure in the U.S., a move that was highly scrutinized across distribution since being announced last year.

“Pricing has been a barrier to our growth both with large and mid-size customers. This was a very complex change that required a lot of work, lot of collaboration and great execution to pull off,” Macpherson said.

“Turning to more specifics in the U.S., we’re continuing to see that our value proposition resonates with both large and mid-size customers when we remove pricing as a barrier. U.S. large customer volume increased 8 percent versus the prior year and 300 basis points sequentially.”

The volume growth hasn’t altered Grainger’s revenue guidance for 2018, Macpherson said. The company will keep its projections of 3 to 7 percent sales growth for the year.

We’ve written extensively about Grainger’s pricing initiative. For deeper coverage of the topic, click to purchase or download our special report, Grainger’s Web Pricing Initiative. The series, written by Lee Nyari, includes three articles:

  • Pt. 1: A ‘Suboptimal’ Solution?
  • Pt. 2: The Quest for Optimization
  • 6 Lessons for Other Distributors

Related Posts

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!


articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events



You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.