W.W. Grainger Inc. reported today a 13.6% increase in online sales in 2015, a year in which total sales barely increased under the impact of a strong dollar and falling oil prices that reduced demand from oil industry companies.
The provider of products used by companies for their internal maintenance, repair and operations says e-commerce sales last year reached approximately $4.09 billion, 41% of total sales of $9.973 billion. This is a 13.6% increase from the $3.6 billion earned in e-commerce sales in 2014.
Strong operating performance at Zoro Tools Inc., Grainger’s online-only subsidiary that sells products at discounted prices mainly to small- and medium-size U.S. businesses, and MonotaRO, Grainger’s Japanese subsidiary, were the main drivers of online sales growth for the year ended Dec. 31, 2015, the company says.
Zoro recorded $296 million in U.S. sales, a 62% increase from $182.7 million in 2014, the company says. Grainger declines to break out sales at MonotaRO.
“This was a challenging year for us and for most industrial companies, with an unprecedented combination of declining oil and commodity prices, low inflation and a strong U.S. dollar,” says Jim Ryan, chairman, president and CEO. While taking several steps to cut costs last year, Ryan says Grainger “also continued to invest for the future by expanding and upgrading our industry-leading supply chain, digital capabilities, sales force productivity tools and KeepStock, which enables us to serve customers the way they want to be served.” KeepStock is an MRO inventory management solution that customers can sign up for through Grainger. The cost of the solution was not immediately available.
In 2015, Grainger deployed an enterprise resource planning, or ERP, system from SAP SE in Mexico and on Feb. 1 will complete the installment of the technology in Canada. The ERP system, which Grainger uses to organize such things as inventory and financial records, provides “for better data visibility across North American businesses and ultimately enabling direct ship to customers from distribution centers in Canada and the U.S,” Grainger says.
Grainger also opened distribution centers in Toronto and Japan this year to improve customer service and efficiency, the company says.
Among Grainger’s e-commerce investments in 2015 was the September acquisition of United Kingdom-based Cromwell Group Holdings Ltd., a distributor of business and industrial products with a large e-commerce presence in Europe. Cromwell’s sales totaled $291 million during the Grainger’s fourth quarter.
Sales to U.S. and Canadian customers represented approximately 82% of Grainger’s total sales during Q4. Sales to U.S. retailers increased in the mid-single digits from the year-earlier quarter, and sales to government customers were up in the low single digits, the company says. Sales to all markets except government and forestry were down compared with 2014 in Canada, the company says.
Grainger reported the fourth quarter ended Dec. 31:
- Total sales of $2.478 billion decreased 1.3% from $2.511 billion in 2014;
- Net earnings decreased 2.7% to $145 million from $149 million in 2014.
Grainger also reported for the full year ended Dec. 31:
- Total sales of $9.973 billion increased less than 1% from $9.965 billion in 2014;
- Net earnings decreased 4% to $769 million from $802 million in 2014.
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