In the recently released 2013 NAW-McGladrey Distribution Monitor from the National Association of Wholesaler-Distributors, 61 percent of distributors reported they are “holding steady” in 2013.

About 32 percent of distributors said they were “thriving,” and 7 percent reported they are “declining.”

About 94 percent of thriving distributors in the survey reported a sales increase in the past 12 months, compared with 70 percent of distributors holding steady and 35 percent of declining distributors. Executives at declining distributors posted an average 4.1 percent decline in U.S. sales and expect a 2.1 percent decrease in the next 12 months.

By size, more than one-third of large distributors (37 percent) and mid-sized distributors (38 percent) report they are thriving, compared with 28 percent of small distributors.

What’s interesting about this survey is that it broke out other results by whether a distributor was thriving, holding steady or declining in 2013.

For example, distributors reporting declining growth were more likely to say that the economy would limit their growth this year than those distributors who are thriving. A little over 80 percent of executives at declining distributors expect the U.S. economy to limit their growth, compared with 55 percent of executives at distributors holding steady and 45 percent at thriving distributors.

The differences between growing and declining distributors continued when looking at where the various companies are planning to invest for growth over the next 12 months.

Overall 48 percent of distributors rated investing in new or upgraded information technology as important or extremely important to their corporate objectives; broken out, 50 percent of thriving distributors did, compared with just 38 percent of declining distributors.

Here’s the chart from the NAW-McGladrey report illustrating the differences between distributors that reported they are thriving, holding steady and declining in 2013:

Other differences highlighted in the report:

• More thriving distributors (87 percent) increased productivity in the past 12 months, compared with 67 percent of distributors holding steady and 33 percent of those declining.
• Best practices in addressing skills gaps with internal training and skills development are more likely to be found at distributors that are thriving or holding steady (73 percent of both) than those declining (63 percent).
• Thriving distributors are more likely to invest in equipment to improve profit (44 percent) than distributors holding steady (31 percent) and declining distributors (15 percent).

In general, the report showed that thriving distributors are generating enough cash flow to plan for investments in new products and product lines, IT and process improvements and other expansions. But distributors reporting declining conditions are more likely than the growing businesses to focus on cost-cutting strategies, including divesting business units, closing facilities and warehouses and selling their businesses.

The latter needs to be careful they don’t hurt their ability to grow, according to Harvard’s Robert Kaplan. He spoke about the impact of cuts in Take Strategy to the Front Lines.

“During a slowdown you have to look much more closely at all the spending programs and all the capacity you have put in and hold onto only those that you want to sustain into the future,” he told MDM. Don’t cut items from your business that are critical to your strategic edge, he said, or the cuts you make may force you into a spiral you can’t get out of.

The NAW-McGladrey report has been tracking the survey results by how well companies are doing since 2006. It sums up its findings this way: “The survey results have made clear that these successful companies are investing in their futures and are more likely to regularly put a percentage of revenue in a number of areas.”

These include continuous improvement, international expansion and exporting, training and productivity, information technology, strategic sourcing and acquisitions.

Get the full survey results here.