W.W. Grainger Inc. is pushing ahead with ecommerce sales on multiple fronts as its electronic channels drive some of its strongest growth.
Sales grew 19% year over year in 2019 to $1.9 billion at the distributor’s “endless assortment” maintenance, repair and operations (MRO) products business, Grainger says. This includes the company’s Zoro and MonotaRO single-channel, web-only businesses, said Tom Okra, Grainger’s chief financial officer, on a conference call with stock analysts today.
By comparison, Grainger’s total sales increased 2.5% to $11.5 billion.
Grainger also announced today that it has named Masaya Suzuki, CEO of MonotaRO, to also head up Zoro as the managing director of Grainger’s endless assortment businesses.
Grainger didn’t break out sales separately for Zoro and MonotaRO, but last year it noted 2018 sales of “more than $500 million” at Zoro, which operates primarily in the United States but also in the United Kingdom and Germany; and “nearly $1 billion” at MonotaRO, which sells to customers in Japan and other countries in Asia. Zoro and MonotaRO specialize in providing a wide range of products (several million on Zoro and about 20 million on MonotaRO), but without the full-service treatment for customers that Grainger provides through its branch network and its flagship ecommerce site, Grainger.com.
Growth at Zoro and MonotaRo, however, coincided with lower gross profit margins caused by Zoro’s product mix and promotional activities, as well as freight costs at MonotaRO, executives said.
Zoro heading to 10 million SKUs
On the call today, Grainger CEO D.G. Macpherson said the company plans to expand Zoro’s available inventory to about 10 million SKUs over the next three to five years. Grainger launched Zoro in 2011.
Grainger didn’t break out total electronic sales for the fourth quarter or the full year but has said in earlier comments that electronic sales, including sales through its ecommerce sites and internet-connected vending machines placed at customer locations, were trending about 60% of total sales in 2019, following a 57% share in 2018. Using those figures, electronic sales accounted for $1.71 billion in the quarter, up about 9% from approximately $1.57 billion a year earlier, and $6.89 billion for the year, up about 8% from approximately $6.40 billion.
For the fourth quarter ended Dec. 31, Grainger reported:
- Net sales increased 3% year over year to $2.85 billion;
- Gross profit increased 1% to $1.08 billion, resulting in a gross profit margin of 38.0%, down from 38.6%;
- Net earnings fell by 51% to $103 million; adjusted earnings, which exclude restructuring and income tax items, dropped by 6% to $212 million.
For the year ended Dec. 31, 2019, Grainger reported:
- Net sales increased 2% year over year to $11.49 billion;
- Gross profit increased 1% to $4.40 billion, resulting in a gross profit margin of 38.3%, down from 38.7%;
- Net earnings increased 8% to $849 million.
Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week, covering technology and business trends in the growing B2B ecommerce industry. Contact editor Paul Demery at [email protected] and follow him on Twitter @pdemery.
Follow us on LinkedIn and be the first to know when new Digital Commerce 360 B2B News content is published.Favorite