MDM-Podcasts-launch
Need Help? (888) 742-5060

In The News:

Grainger Sales Hit $9.4B in 2013

Chicago-based MRO distributor Grainger (NYSE: GWW) reported sales for the year ended Dec. 31, 2013, were $9.4 billion, up 5 percent from 2012.

Profit was $797 million, up 16 percent.

"Despite a sluggish economic environment and aggressive investments in growth and infrastructure, this was another record year for Grainger," said President and CEO Jim Ryan. "We made significant investments aimed directly at increasing our scale and accelerating share gains in the large and highly fragmented MRO market. Going forward, we will continue to invest in areas such as e-commerce, sales force expansion, inventory management solutions and distribution centers in order to drive market share growth and deliver solid returns.

"As evidenced by the restructuring in the quarter, we have some areas of the business that are not performing to our expectations.  We are committed to improving the results and are taking the appropriate steps to strengthen the performance of these businesses.”

During 2013, the company invested an incremental $132 million primarily in the U.S.

Some details:

  • Grainger surpassed $3 billion in e-commerce sales in 2013, representing 33 percent of total company sales. The company also transitioned to a new Web platform, launched a Spanish website and introduced mobile solutions.
  • In the U.S., Grainger added 180 new sales representatives in 2013. Since 2009, Grainger has added 930 new U.S. sales representatives who, in aggregate, contributed about 1 percentage point of company sales growth in 2013. In general, sales to customers with a sales representative grow at twice the rate of customers that are not covered.
  • Total U.S. KeepStock installations, including vendor managed inventory, customer managed inventory and vending machines, grew 38 percent, ending the year at about 55,000 installations. Sales to customers with a KeepStock installation grow at twice the rate of non-KeepStock customers.
  • In the Grainger U.S. business, Grainger.com added more than 300,000 new products, bringing the total number of products to more than 1.2 million products online. In Canada, Acklands-Grainger announced the addition of 200,000 products to its online offering.
  • Grainger opened a 1 million-square-foot highly automated distribution center in Illinois that serves as the company's new central stocking facility. Grainger also began construction on a 500,000-square-foot distribution center in the Toronto area.
  • MonotaRO, the online business in Japan, grew nearly 20 percent in local currency in 2013. Revenue for the company's other online business, Zoro Tools, grew more than 150 percent in 2013.

Company sales in the 2013 fourth quarter increased 7 percent. The 7 percent sales growth for the quarter consisted of 5 percentage points from volume, 4 percentage points from acquisitions and 1 percentage point from sales of seasonal products, partially offset by 2 percentage points decline from unfavorable foreign exchange and 1 percentage point from sales related to Hurricane Sandy in 2012.     

The company's gross profit margin for the quarter decreased 130 basis points, driven by lower gross margins from the acquired businesses, accounting for approximately two-thirds of the decline, and faster growth with lower margin customers. 

Sales in the U.S. segment increased 10 percent in the 2013 fourth quarter versus the prior year. The 10 percent sales growth was driven by 5 percentage points from volume, 6 percentage points from sales from the E&R Industrial, Techni-Tool and Safety Solutions acquisitions and 1 percentage point from sales of seasonal products, partially offset by a 1 percentage point decline from price and 1 percentage point from unfavorable comparison to sales related to Hurricane Sandy in 2012. 

Strong sales growth to customers in the manufacturing, retail, natural resources and commercial customer end-markets contributed to the sales increase in the quarter. 

Sales in the 2013 fourth quarter at Acklands-Grainger in Canada decreased 3 percent and increased 3 percent in local currency. The 3 percent sales decline consisted of 3 percentage points increase from volume offset by a 6 percentage points decline from unfavorable foreign exchange. The sales increase in Canada was led by growth to customers in the commercial, transportation, light manufacturing and forestry end markets.

Sales for the Other Businesses, which includes operations primarily in Asia, Europe and Latin America, increased 3 percent for the 2013 fourth quarter versus the prior year. This performance consisted of 11 percentage points of growth from volume and price, partially offset by an 8 percentage point decline from unfavorable foreign exchange. Sales growth in the Other Businesses was driven by Zoro Tools and the business in Mexico. Strong sales growth in Japan was offset by the weakness in the Japanese yen versus the U.S. dollar.  

© 2019 Gale Media, Inc.

Please do not reprint MDM's content on your website without MDM's express permission as it is copyrighted material. To gain permission, email us, or call 1-888-742-5060. For information on PDF or print reprints, visit www.mdm.com/reprints. MDM welcomes inbound links from your site. Please cite Modern Distribution Management.

2018-top-distributors-listThe 2018 Top Distributors List

This free PDF includes lists of top distribution companies across 14 sectors.

You will also receive MDM Update, our daily distribution e-newsletter & other distribution-focused content.

Download the Free PDF now >>


MDM-UpdateMDM Update: Daily Newsletter 

Sign up to read the best source for news & trends in wholesale distribution, MDM Update. Delivered daily to your inbox. 

Sign-up for MDM Update >>

Partner Center