The 2020 Mid-Year Economic Update_long

IRCG’s Weekly Pandemic Revenue Index Shows 13.6% Decline

Though n improvement over the previous week's number, the uplift in sales may be due to large back-orders shipping, and not an indication that the situation is improving. When the exceptional sales mentioned by participants are excluded, the sales drop off would be very consistent to what was seen the prior week.
graphic of economic instability with covid-19 coronavirus in the background

Indian River Consulting Group’s weekly Pandemic Revenue Index for the week of March 30-April 3, 2020, indicated a 13.6% decline compared with the same week a year ago. This is an improvement over the prior week’s index.

IRCG reported there were some comments provided by respondents when they reported this week’s numbers, that the uplift in sales was due to large back-orders shipping, and not an indication that the situation is improving. When the exceptional sales mentioned by participants are excluded, the sales drop off would be very consistent to what was seen the prior week.

IRCG Pandemic graph week 3

Source: IRCG.com

With the increase in “stay-at-home” orders and continued dramatic increases in unemployment, it will be very interesting to see what the next few weeks’ numbers look like.

IRCG began publishing the distributor Pandemic Revenue Index the final week of March as a way to give distributors a weekly quantified view into how other distributors in the industry are faring with respect to revenue declines as the global COVID-19 pandemic progresses.

IRCG has also released an on-demand webinar to accompany the free downloadable cash-flow modeling spreadsheet they’ve developed to assist distributors in identifying liquidity risks to their businesses. Both are available at ircg.com/stress-testing.

“In building the cash-flow modeling tool, we tried very hard to balance complexity and having an output that would be accurate and helpful. Many distributors have probably already built their own tools, but for those that haven’t, a four-tab Excel Workbook may come across as onerous,” said Mike Emerson, IRCG partner. “The webinar is relatively short and illustrates how with not a lot of work a management team can quickly identify actions they should be considering.

“This week’s PRI Index shows a sales decline, however, there were some comments provided by respondents when they reported this week’s numbers that the uplift in sales was due to large back-orders shipping, and not an indication that the situation is improving. When the exceptional sales mentioned by participants are excluded, the sales drop-off would be very consistent to what we saw the prior week. With the increase in stay-at-home orders and continued dramatic increases in unemployment, it will be very interesting to see what the next few weeks’ numbers look like.”

The PRI is being placed in the public domain to maximize impact. The distributors in Indian River Consulting Group’s sample group have agreed to share data until the crisis passes. The sample size for the week of March 30-April 3, 2020, data is eight firms. IRCG expects that the sample size will continue to increase weekly.

If you’d like to participate in the PRI, please reach out to Mike Emerson, IRCG partner, at memerson@ircg.com.

 

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