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W.W. Grainger closes in on capturing 40% of sales online

April 16, 2015 03:49 PM
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The momentum of e-commerce sales growth at W.W. Grainger Inc. keeps getting stronger. The company recently forecast that e-commerce would surpass 50% of total sales in the near future, and its most recent financial report showed it nearing that goal.

The distributor of business and industrial supplies—maintenance, repair and operations products ranging from janitorial supplies to electrical generators and machine parts—reported today that e-commerce sales were “about 40%” of total sales for the first quarter ended March 31.

That brings Grainger’s Q1 e-commerce sales to about $976 million, up 17% from $835 million in the same quarter last year, as total sales increased only about $50 million to $2.44 billion from $2.39 billion, indicating that sales through stores and sales reps fell. The company adds that it plans to hire 400 sales reps this year; a total number of reps wasn’t available. Grainger notes that e-commerce as a percentage of total sales is up from 15% in 2009.

Jim Ryan, president, CEO and chairman, says e-commerce and multichannel sales were indeed a bright spot in the quarter, as the company weathered lower demand from some customers, particularly in the petroleum industry. “This was a challenging quarter,” he says. “Our results were affected by continued headwinds from the strong U.S. dollar and weakness in the oil and gas sector in North America. We remain encouraged by the growth achieved with large customers in our U.S. multichannel business and the customer acquisition strategy that is fueling our single-channel online businesses.”

In the United States, Grainger says Q1 sales were helped by a 1% increase in sales through Zoro.com, Grainger's off-price e-commerce site for business and industrial supplies.

In Canada, Grainger says Q1 sales decreased 8% in U.S. currency through its Acklands-Grainger business, which operates the e-commerce site AcklandsGrainger.com.

Grainger didn’t break out more sales figures for its main e-commerce site, Grainger.com.

Grainger also reported for the three months ended March 31:

● Net earnings of $214.15 million, down 1.2% from $216.65 million a year earlier;

● Cost of merchandise sold was $1.3459 billion, up 2.8% from $1.3097 billion;

● Earnings before income taxes of $347.64 million, down 1.1% from $351.61.

Grainger is No. 13 in the Internet Retailer Top 500, which ranks companies by their annual web sales. Grainger was recently named a finalist for the B2B E-commerce Player of the Year award, which will be granted this June at the inaugural Internet Retailer Excellence Awards ceremony.

Sign up for a free subscription to B2BecNews, a weekly newsletter that covers technology and business trends in the growing B2B e-commerce industry. B2BecNews is published by Vertical Web Media LLC, which also publishes the monthly trade magazine Internet Retailer. Follow B2BecNews editor Paul Demery on Twitter @pdemery.

 

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