Indian River Consulting Group’s (IRCG) weekly distributor Pandemic Revenue Index (PRI) — launched last week to provide the B2B distribution space with a snapshot of how distributor revenues are doing amid the COVID-19 pandemic — shows that conditions significantly deteriorated in the week of March 23, sending sales down considerably.
Following a 2.23 percent year-over-year decline for the week of March 16-20*, the PRI shows that participating distributors saw sales plummet 23.5 percent for the week of March 23-27.
“With the spike in unemployment claims, there should be no surprise with this decline,” IRCG said Tuesday. “The safe bet is that the rate of decline will only increase in the short-term, so stay tuned for updates next week.”
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The chart below shows the percent change in sales in 2020 compared with the same week in 2019, helping to reveal how revenue declines may have driven by uncontrollable forces, such as the current COVID-19 global disruption.
The sample size for the week of March 23-27 is eight distributors. IRCG said it expects the sample size will continue to increase weekly, and that distributors interested in participating should contact IRCG founder Mike Marks at [email protected].
“Remember that every distributor provides a customized value proposition to their customers, so COVID-19 will affect each company differently,” Marks commented Tuesday. “We know of distributors that have locations this month that are well ahead of both plan and last year. We have had a lot of conversations with our clients on the COVID-19 impacts. Based on those conversations, there may be a pattern emerging. It appears that many distributors may go along with no real hit, but when it does hit, it will be a gut-punch.”
Marks added that at this point, distributor revenue seems to be most affected by a drop in customer demand. If that turns out to be true, then supply chain shortages will be the primary issue once the COVID-19 situation resolves.
*IRCG noted that the initial reading for the week of March 16-20 showed a value of -5.56 percent, but that two of its original data providers made mistakes that have been corrected, resulting in the amended -2.23 percent reading.