Grainger May Sales Flat In U.S., Down In Canada

Continued weakness in the oil and gas sector contributed to declines in Grainger's U.S. markets for natural resources and heavy manufacturing, while commercial, government, and light manufacturing showed modest gains.

Grainger – No. 3 on Industrial Distribution's 2014 Big 50 List – released its sales information for the month of May on Friday.

Overall, sales were flat in the month, with U.S. sales up 1 percent year-over-year, Canada sales down 11 percent (-1 percent in local currency), and Other Businesses sales up 11 percent (+26 percent in local currency). Dollar amounts were not given.

Results included 1 percentage point from acquisitions and a 3 percentage point decline from currency headwinds. Excluding those two factors, organic sales increased 2 percent, including 3 points by volume, offset by a 1 point decline in price. May 2015 had one fewer selling day than May 2014.

Grainger reported ​U.S. sales by customer end market were as follows:

  • Commercial was up in the mid-single digits
  • Government and Light Manufacturing were up in the low single digits
  • Retail was flat
  • Contractor and Heavy Manufacturing were down in the low single digits
  • Resellers was down in the high single digits
  • Natural Resources was down in the mid-teens

Grainger said the decline in Natural Resources and Heavy Manufacturing was attributable to continued weakness in the oil and gas sector. The strong U.S. dollar also represented a continued headwind for customers who export.

In Grainger's Canadian segment, daily sales decreased 11 percent in U.S. currency and were down 1 percent in local currency. The company said its Canada results continue to be affected by unfavorable foreign exchange and macroeconomic weakness, while softness in the oil and gas sector accelerated the decline in sales growth. The 1 percent daily sales decrease in local currency was driven by a 12 percentage point decline in volume, partially offset by 8 percentage points increase from the September 2014 WFS acquisition and 3 percentage points increase from price. The volume decline was driven by lower sales to the Oil & Gas, Contractor, Commercial, Forestry, Retail and Heavy Manufacturing customer end markets, partially offset by growth in the Government, Mining, Utilities and Light Manufacturing customer end markets. Most provinces outside of Alberta posted positive sales growth in May.

Daily sales in May for our Other Businesses increased 11 percent, consisting of 26 percentage points of local currency growth from volume and price, partially offset by a 15 percentage point decline from foreign exchange. The daily sales growth in the Other Businesses was primarily driven by the single channel online businesses in the United States (Zoro) and Japan (MonotaRO).