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Grainger's Ultimate Product Expansion Plans

Grainger's Ultimate Product Expansion Plans

September 22, 2010

At the recent Morgan Keegan Industrial/Transportation Conference, Grainger U.S. President Michael Pulick says the company is aiming for up to 500,000 products in its catalog. (It already has that many online, where it's able to offer more at a lower cost-to-serve, as well as test product offerings.)

That would be up from just over 80,000 in 2005. That's a planned 490 percent increase. Pulick says that the distributor, No. 3 on MDM's list of top 40 industrial distributors, has been able to and plans to continue to maintain customer service levels despite the increase in products.

Here's a graphic from Grainger's presentation showing the distributor's product line growth through 2010 - numbers shown represent total products. (See the full presentation here):

Grainger product expansion - 2005 to 2010

In recent years, the distributor has added products in plumbing, fleet maintenance and metalworking, among others. It has also added to current categories with products that boast different features or functions.

Grainger says its product line expansion has resulted in $687 million in additional sales revenue in 2008, and $934 million in 2009.

Grainger also plans to continue growing its private label offering, Pulick says. Right now, private label accounts for 23 percent of Grainger's overall revenue, and is one way of growing gross margin. One way to do this is to increase the percentage of its private label sourced from outside of the U.S.

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