In 2014, operating revenue for Canadian wholesalers was up 5.9 percent and reached the C$1 trillion (US$770.1 billion) mark for the first time. Eight of nine subsectors posted increases.
The cost of goods sold, which represented 83.9 percent of total operating revenue, rose 5.6 percent to C$859 billion (US$661.5 billion) in 2014. Gross margins for wholesalers (the difference between total operating revenue and the cost of goods sold) edged up from 15.9 percent in 2013 to 16.1 percent in 2014.
Total operating expenses, which include labor remuneration, were up 4.6 percent to C$120 billion (US$92.4 billion). Operating profits as a percentage of total operating revenue advanced from 4 percent in 2013 to 4.4 percent in 2014.
In dollar terms, the petroleum products subsector recorded the largest increase in operating revenue, up 4.1 percent to C$326 billion (US$251.1 billion) in 2014.
In 2014, wholesalers of petroleum products accounted for the largest proportion of wholesale trade sector revenues, with 31.9 percent of total operating revenue, down from 32.4 percent in 2013.
The motor vehicles and motor vehicle parts and accessories subsector posted the second largest gain, up 11 percent to C$114 billion (US$87.8 billion) in 2014. The main contributor to the advance among the three groups in this subsector was the motor vehicle industry, with a 10.4 percent increase in operating revenue. This group alone accounted for 71.6 percent of the gain in total operating revenue.
Expressed as a percentage of total operating revenue, gross margins rose from 15.9 percent in 2013 to 16.1 percent in 2014. Gains were posted in six of nine subsectors.
Gross margins as a percentage of operating revenue vary widely among the wholesale trade subsectors, depending on the cost structure of the different types of wholesalers. Among wholesale merchants in 2014, wholesalers of petroleum products (3.7 percent) had the lowest margin. The highest margin among wholesale merchants was in the personal and household goods subsector (26.7 percent), followed by the machinery, equipment and supplies subsector (25.8 percent).
Seven of nine wholesale trade subsectors posted increases in their operating profits as a percentage of operating revenue in 2014.
Among wholesale merchants, wholesalers in the farm products subsector posted the largest gains in operating profits as a percentage of revenue, advancing from 2.2 percent in 2013 to 4.8 percent in 2014.
In 2014, wholesalers of food, beverage and tobacco reported operating profits at 4.5 percent, down from 4.8 percent in 2013. This was the largest decrease among wholesale merchants. An increase in operating revenue (+4.4 percent) was offset by a larger gain in the cost of goods sold (+5.9 percent).
All provinces reported growth in operating revenue in 2014. In dollars terms, the rise in operating revenue in Ontario and Alberta represented 66.6 percent of the total increase.
