MDM-Baird Survey Results Highlight Growing Role of Integrated Supply, Vending in Market

Overall, sales growth was steady in the first quarter survey, and is expected to continue through 2012.

Good news: The results of the first quarter 2012 MDM-Baird distribution benchmarking survey really represented a continuation of many of the same things we saw in the fourth quarter of 2011: Steady growth continued across most sectors and the outlook for the rest of the year is for that to continue.

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"We really saw very strong results across sectors," says David Manthey, senior analyst for Robert W. Baird & Co. "It's a good continuation of what we saw coming into this year."

There was one thing that stood out in this survey, however, Manthey says. "The No. 1 trend we heard from this survey is the explosion of vending offerings from some of the national players," he says. MDM Editor Lindsay Konzak covered this trend in a recent blog post: Vending Becomes a Key Component of Growth for MSC and Fastenal.

Integrated supply options and other related higher level services also seem to be gaining more traction among some of the bigger players. (Read MDM’s take on the integrated supply landscape in The Refinement of Integrated Supply)

"Integrated Supply is still changing the industrial landscape," one respondent wrote. "More independent distributors will feel the pinch of eroding customer bases. Tougher than heck to sell these days."

Here is the overview of the first quarter 2012 results:

  • On average sales grew 8.4 percent in the first quarter 2012 for respondents.
  • On average survey respondents expect revenue growth of 7 percent in the second quarter of 2012 and 5.6 percent for the full year.
  • Cutting tools and welding hardgoods saw greatest growth; fasteners and HVAC had the smallest revenue growth.
  • Unusually warm weather played a moderate role in sales increases in some sectors.
  • Nearly half of respondents increased inventory levels in the first quarter; 42 percent expect to increase inventory in the second quarter.

Thank you to all who participated in this quarter’s survey!

Read more about the results of the first quarter 2012 survey, including results by sub-sector, in the latest issue of MDM Premium – First Quarter 2012 MDM-Baird Survey Results

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