Texas is already home to more W.W. Grainger Inc. facilities than any other state, but a mammoth new distribution center with broad implications for B2B customers is underway.

And Texas is a harbinger of other expansion in other states.

Anand Lal, group vice president, supply chain, W.W. Grainger Inc.

Grainger broke ground early this month on the 1.2-million-square-foot Houston Texas Distribution Center, which will be one of the company’s largest facilities when it opens as planned in 2026. With stocked industrial supply products numbering up to 300,000 — twice the amount currently available in the Houston-area market — the  new distribution center, with 400 employees backed by automation systems, will significantly expand the volume of next-day delivery service, Grainger says.

“Our goal is to ship next-day, complete orders,” says Anand Lal, group vice president, supply chain. “To do this, we need to have a broad range of products stocked close to our customers. Greater Houston is an ideal location given its geographical proximity to current and potential Grainger customers.”

For the second quarter ended June 30, its most recently reported financial period, Grainger said net sales increased 3.1% year over year to $4.3 billion.

A DC that could cost “up to $110 million”

Grainger, which currently operates 34 distribution centers overall, stocking over  1.4 million products, has ambitious plans backed by planned spending for ongoing development of distribution and supply chain capacity.

The company didn’t publicize the cost of its new Houston facility, which will be located on a 108-acre land parcel in the Greater Houston area community of Hockley, Texas. But a news article by commercial real estate industry publisher CoStar linked from the website of Powers Brown Architecture, the building design firm for the project, says a work permit filed with the state estimated the project “could cost at least $110 million to build.” Powers Brown is working with Hines, a global real estate development company Grainger has hired to manage the project.

In its 2023 annual 10K filing, Grainger said it expects to spend “in the range of $400 [million] and $500 million” on capital project expenditures, including “continued supply chain capacity expansion and technology enhancements across the company.” That would follow the $450 million Grainger spent last year on capital projects.

Grainger expands in Texas and beyond

In Texas, Grainger already operates over 45 locations,  including six branches in the city of Houston, and, outside of Dallas, a 374,000-square-foot distribution center and a 441,000-square-foot bulk warehouse.

An artist’s rendering of Grainger’s planned Houston DC.

“Grainger’s Houston Texas Distribution Center is going to be a state-of-the-art building that serves as a significant and tangible investment in our future,” says Rob Reynolds, Grainger’s senior vice president, Branch and DC Operations.

DG Macpherson, chairman and CEO, said in an earnings call earlier this year that the new Houston distribution center, plus a 525,000-square-foot DC in Pineville, North Carolina, scheduled to open later this year, and a 535,000-square-foot DC in Gresham, Oregon, on track to open next year, will contribute to a 35% increase, or 3.5 million square feet, over the 10 million square feet Grainger had at the beginning of 2023.

“These latest investments will only strengthen our promise to customers who count on us to provide next-day complete orders to keep their operations running and people safe,” he said.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].

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