Newton, Mass.—The nation's largest industrial distributor, W.W. Grainger, will add 16 branches, relocate 20 existing branches, and expand 19 branches as part of a nationwide expansion program announced last year.

Grainger Chairman and CEO Richard L. Keyser announced details of the plan to analysts attending the annual meeting of the Electrical Products Group of New York, held in Longboat Key, Fla., in early May.

"Our initiatives are just beginning to help us grow, not only sales, but our share of the $100 billion facilities maintenance market," said Keyser, explaining that the plan is to grow Grainger's presence in 25 metropolitan markets.

This year, Grainger will add 16 new, larger branches; relocate 20 full-sized branches to make them more accessible to customers; and expand 19 branches. The changes will occur in Atlanta; Denver; Houston; St. Louis; Tampa, Fla.; and four markets in Southern California.

Increasing product availability and extending sales force coverage in the markets, combined with offering "great" service, are also key elements of the expansion program, according to the company.

Improved customer service is due in part to recent enhancements to Grainger's logistics network, according to the company. Grainger completed the redesign of its network of nine distribution centers to improve product availability for customers, and increase the company's capacity and productivity.

"We've in effect changed all the tires on this car while it is still moving," said Keyser. "We now have more than 1 million additional square feet in the logistics network, and automation to increase accuracy, speed and efficiency."

The company expects to see a $10 million operating earnings benefit in 2004 as a result of the project.

Keyser reaffirmed the company's sales and earnings per share guidance for this year, as well, noting that he expects to finish the year with sales between 5 percent and 10 percent above 2003, and earnings per share between $2.60 and $2.80.