Total sales for U.S. distributors and wholesalers grew in the first quarter. But just barely.
For the first three months of the year, sales totaled about $2.00 trillion. That’s just under a 5.1% increase from $1.985 trillion in Q1 2022, based on data U.S. Department of Commerce data that Digital Commerce 360 compiled.
In comparison and with one exception, the sales of the biggest public distributors of maintenance, repair, and operations (MRO) and industrial supplies grew much faster. W.W. Grainger, Fastenal and MSC Industrial all increased total sales for the first quarter of the previous year. Only Global Industrial lost ground. For the three months ended March 31, Global Industrial posted sales of $273.8 million. That’s a 5.1% decrease from sales of $288.6 million in the first quarter of 2022.
Year-over-year distributor sales Q1
All the big public companies noticed some gathering weakness in some aspects of their business in the first quarter.
“Customer demand was generally in line with expectations for the quarter and continues to remain resilient as a whole despite certain areas of softness,” Grainger chief financial officer Dee Merriwether told analysts on the company’s Q1 earnings call.
Global Industrial says a weaker economy resulted in a year-over-year drop in revenue.
“The first-quarter performance reflects a continuation of the recent demand environment, with average daily sales declining 3.7%,” CEO Barry Litwin told analysts on the company’s first quarter earnings call. “Price was neutral in the period and volume remained muted, reflecting cautionary purchase behavior, specifically within our core, small and medium business customer base.”
But even with a tougher overall economic environment in the first quarter, all the biggest MRO distributors will continue to move out more aggressively on digital commerce.
For example, MSC Industrial Supply Co. late last year took broad steps to bolster its digital technology and operations. It hired its first chief digital officer and investing in ecommerce improvements. MSC — a prominent distributor of metalworking and maintenance, repair, and operations (MRO) products — is no stranger to strong digital sales, which have routinely accounted for well over half of total sales in recent years. Q1 ecommerce reached nearly 62% of total sales, and, under MSC’s new chief digital officer, John Hill, the company is laying the groundwork for continued growth in digital sales.
“John Hill and his team have completed a comprehensive review of our entire digital offering and have built a roadmap for our evolution in the space,” CEO Eric Gershwind said on a Q1 earnings call.
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