Like many industries, the 2018 industrial distribution sector was buoyed by overall healthy economic conditions, full project pipelines, and a thriving construction market. And while rumblings about a possible downturn in 2019 started to get louder, for the most part B2B distributors are optimistic about the remainder of the year and the new one that lies ahead.
As the industrial distribution sector continues to go through some major changes (and when is it not?), even new competitors like Amazon Business, customers buying more online, and the ongoing tariff/trade war challenges aren’t holding this year’s Top 50 Industrial Distributors back from realizing their potential.
As proof, we look to SourceToday’s Top 50 Industrial Distributor ranking, which highlights the 2018 performance of the world’s largest distributors. Ranking seventh on this year’s list, HD Supply saw its sales rise from $5.12 billion in 2017 to $6 billion in 2018.
“We remain confident in our ability to create value by focusing on what we can control, providing the best customer service in the industry, generating strong free cash flow,” said HD Supply’s CEO Joe DeAngelo, in a press release announcing the company’s most recent earnings, “and executing on our capital allocation strategy.”
W.W. Grainger, which took the second spot on this year’s list of top distributors, also experienced a revenue increase, from $10.42 billion in 2017 to $11.22 billion in 2018. In a recent earnings announcement, the company’s chairman and CEO said while the company saw global demand environment continuing to weaken, Grainger’s U.S. and “endless assortment businesses gained share as we made solid progress on our key growth initiatives and were diligent in managing expenses.”
Moving On Up
Each of the top three distributors held their respective positions this year, with Würth Industry, W.W. Grainger, and Airgas/Air Liquide taking those spots. Following closely in their footsteps and rounding out the top five were WESCO International and Motion Industries. As a group, all five of these distributors posted annual sales increases in 2018 (vs. 2017).
HD Supply took the sixth spot on the chart, and was followed by Fastenal, Descours et Cabaud, MRC Global, and Rexel USA, Inc. With the exception of the latter, which saw its annual revenues fall from $5.08 billion to $4.17 billion over the course of the year, all of the distributors in the top 10 posted revenue growth. In a presentation on its third-quarter performance, Rexel credited its lower same-day sales growth on an industrial business slowdown due to the trade war, low OEM activity, and other challenges.
A few notable points from this year’s survey include numerous acquisitions which, in turn, helped to boost revenues for the acquiring companies. OTP Industrial Solutions, for example, purchased Compressed Air Systems, Crimson Electric, and Tape Industrial Sales in 2018. This resulted in its revenues increasing to $460 billion in 2018 (up from $404 billion).
Other companies that saw significant sales jumps included Fairmont Supply, Bisco Industries, and Endries International. Those experiencing slower revenues in 2018 included Womack Machine Supply and Valin Corporation. Newcomers to this year’s Top 50 list included Bridgestone Horsepower, CBT Company, and Tencarva Machinery Co.
Finally, Essendant (United Stationers) and FCX Performance both dropped off of this year’s list because they were acquired by Staples Inc. and Applied Industrial Technologies, respectively.
Download SourceToday's 2019 Top 50 Industrial Distributors List