Fastenal Invests in Vending, Slows Hiring

Vending allows company to grow, despite weak economy.

Although The Fastenal Company, Winona, MN, (Nasdaq: FAST), has decided to slow down on the growth of people, the company continues to focus on investment – especially in vending, said Daniel Florness, president & CEO, in the first-quarter earnings call.

Florness believes investing in people is important for short- and long-term success, however, "we don't have the gross profit dollars in the short-term to pay for it and that's why we are holding tight on headcount as we go into the year." The company also plans to soften store opening expectations for 2016 – down to 40 to 60, instead of the 60 to 75 originally expected.

The company's stores are well-staffed and now Fastenal needs "the business to catch-up and quite frankly, get ahead of our headcount growth a bit," he says.

However, the company continues to invest heavily in vending in order to drive optimization, and increase signing and efficiency.

At the end of March, about 60 percent of the company's machines had been optimized, compared to about 11 percent over a year ago. Additionally, about 80 percent of stores are using the vending tab, which helps make replenishment more efficient and the supply chain more streamlined.

"Even in a weak economy we can grow our business, because we are a better supply chain partner for our customer," Florness says.

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