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  • Beacham Wayne SPR ABC12Will ODP Federate
    or frustrate Dlers?

    Will angst over wholesalers'
    plans fuel acquisition drive?


    Beleaguered
    Office Depot
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    Combined buying squeeze
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    As indicated at Essendant's CORE event in Feb, Staples has combined purchasing power and demanded substantial cost price reductions from vendors. The big question is what savings will be invested in dealer competitiveness and how much pocketed by vulture capitalist owner Sycamore Partners? We discuss... Updated

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    Mobile webstores, One click,
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    Light, more hygienic offices


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  • johnsen walt nyse smileA c m e United
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Screen Shot 2019 07 02 at 10.55.11 AMWholesalers'
Benchmarks'19 

MDM Report highlights
slower economic trends


Modern Distribution Management's (MDM) 14th annual economic benchmarks for wholesalers report examines sales, inventory levels, gross margin, productivity and other critical benchmark data trends for 19 sectors in the distribution industry. We benchmark best practices in business supplies.....Updated

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Screen Shot 2019 07 15 at 2.24.25 PMIn our annual Mid-Year Economic Outlook webcast on July 11, MDM research partner and report author Brian Lewandowski (pic right) will review report highlights, provide a snapshot of current economic conditions and forecast the rest of 2019 and 2020 for key distribution end market segments.

Lewandowski expects 2019’s rate of growth for all distribution sectors to be approximately 2.4%. By comparison, the overall rate of growth for 2018 was 6.8%. “What we're seeing is growing but slowing in the industry,” says Lewandowski. 

Total revenues of wholesale distributors reached $5.9 trillion in 2018. Overall, industry inflation for the 19 wholesale trade sectors exceeded the Consumer Price Index and the Producer Price Index. Real (inflation-adjusted) revenue increased 1.4% in 2018, and correcting for price changes, real industry output for the year grew in 11 of the 19 sectors. Only one sector recorded price declines in 2018 — the Computer Equipment and Software Wholesale Distributors, a sector that has recorded price declines for 20 years.

Of the 19 major wholesale sectors, 17 are projected to record revenue growth in 2019 and 16 in 2020 (in nominal terms).

Quarterly Forecasts by Distribution Sector

New this year are quarterly revenue forecasts for each of the 19 wholesale distribution sectors profiled int he 2019 report through 2020. In addition to a baseline forecast for each quarter, the report also includes alternate optimistic and pessimistic forecast projections to help distributors develop strategic planning scenarios.

“Our expectation when we completed the report in May was that wholesale trade should grow by 2.4% in 2019 and accelerate in 2020 to 4.4%. But if the economy does even better, we can see a lot stronger growth come out of wholesale trade — we're talking 3.4% and 8.2% in 2019 and 2020 respectively. However, if we do in fact move to more of a recession scenario, we do see a decline in wholesale trade revenue this year and next year,” Lewandowski explains.

grainger conveyorThe sectors included in the report and available for individual purchase are:

  • Industrial (See Grainger pic right)
  • Hardware, Plumbing & Heating Equipment/Supplies
  • Electrical/Electronics
  • Grocery & Foodservice
  • Building Material & Construction
  • Oil & Gas Products
  • Motor Vehicles & Motor Vehicle Parts
  • Other Consumer Products
  • Miscellaneous Durable Goods
  • industrial supplies invasionCommercial Equipment & Supplies
  • Computer Equipment & Software
  • Agricultural Products
  • Apparel & Piece Goods
  • Beer, Wine & Liquor
  • Chemicals & Plastics
  • Office Products
  • Furniture & Home Furnishings
  • Metal Service Centers

Business Supply Market Analysi/Comment

The $250Bn US Business Supply market may be analysed by category as follows:

  • Office Supplies 15% mix - declining at -8% pa
  • Office Furniture 10% mix - growing at +3% pa
  • IT supplies 25% mix - growing at +3% pa
  • WB customer intimacy heartFM supplies inc. hygiene, refreshments, safety & security 30% mix - growing at +3%
  • Packaging & foodservice 15% mix - growing at +4%
  • Print, workwear, ad spec 5% mix - flat
  • TOTAL Market 100% growing +1.35%

The Proficiency Index - Key Benchmarks determining success are as follows: 

  • Productivity - Sales per employee (8 hour equivalent) - Best Practice at $500k+/ee
  • Average Order Value - Best Practice at $200+ (Wholesaler rate) $150+ (Dealer rate) 
  • Revenue % Growth Rate - Best practice above market rate at 2%+
  • Cost to Serve %/sales - Best Practice 12-15% (wholesaler rate); 18-21% (dealer rate)
  • Warehouse productivity rate - Best Practice 30+ lines/hour (Total day's line picked/total warehouse team hours input)
  • Delivery productivity - Best Practice Region (rural/urban) 50 - 70 drops/day; Urban/City 80-100 drops/day

 

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Latest Frost Bites

Will Depot Federate or fragment dealers?

Beacham Wayne SPR ABC12Will ODP Federate
or frustrate Dlers?

Will angst over wholesalers'
plans fuel acquisition drive?


Beleaguered
Office Depot
made its 10th dealer acquisition in May, since its Federation drive started in Oct'17. PP sources understand another batch may join in Q3. Given Depot's fragile market capitalisation, what are wholesalers doing to defend a potential dealer exodus? Later today

Read More...

Staples stokes up supplier #STRESS

vulture staples removerStaples stokes up
supplier #STRESS

Combined buying squeeze
expected to gain $250m

 
As indicated at Essendant's CORE event in Feb, Staples has combined purchasing power and demanded substantial cost price reductions from vendors. The big question is what savings will be invested in dealer competitiveness and how much pocketed by vulture capitalist owner Sycamore Partners? We discuss... Updated

Read More...

Papermakers protectionist propaganda persists

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protectionist
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'High capacity' rhetoric
unbelievably ridiculous


The Big 3 US papermakers' cartel behaviour persists. After the Georgia Pacific mill closure saga induced panic buying ahead of a phantom March price increase, distributors stocked to the rafters. Now with demand sliding are the domestic makers propagating near capacity limits to boost another price increase claim? On Monday inc latest papermakers reports

 

Read More...

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