Your local distributor may be part of a much bigger operation than you realize. Many of the largest electrical distributors in the United States and Canada have dozens or, in some cases, hundreds of branch locations. Some of them sell billions or hundreds of millions of dollars of electrical equipment to electrical contractors, facility maintenance personnel, and other customers.
Of course, size can play an important factor in which distributors do the best job servicing their customers’ electrical supply needs. But the reality is that whichever electrical distributor – be it a national chain or a smaller family-owned business — does the best job of getting customers the right electrical products at the right time to the right place at a reasonable price tends to be the most successful (see Table).
Electrical Wholesaling magazine’s annual ranking of the largest distributors in North America provides a snapshot of how these companies solicit your business and the key trends affecting the electrical market. The two biggest trends in this year’s ranking were major acquisition activity and a solid sales recovery after the negative impact of COVID-19 on the 2020 revenues of full-line and specialty distributors of electrical supplies.
One of the biggest trends — mergers and acquisitions — majorly impacted the 2021 rankings. Case in point: WESCO’s 2020 acquisition of Anixter pushed it to the top spot on the list with $11 billion in North American revenues. The Philadelphia metro’s Rumsey Electric sale to Kendall Electric, Portage, Mich.; OmniCable’s purchase of Houston Wire & Cable; and Supply Chain Equity Partners’ acquisition of Electric Supply in Tampa, Fla., were also major deals.
Sales bouncing back
Of the 40-plus distributor execs who provided a sales forecast for the Top 150 Ranking survey, 10 were expecting a rebound of more than 20% in 2021, and 17 saw an increase of 10% to 15%. The average for these responses was a 12.5% increase (the historical average for annual sales growth in the electrical wholesaling industry is between 4% and 8%).
Johnny Andrews, COO for TEC Manufacturing & Distribution, Georgetown, Texas, says his company saw solid growth in 2020 and is expecting 10% growth in 2021. He attributed the company’s 2020 surge to “huge growth in all sectors in Texas and market share increase. Also, new sole source alliances, broadband, AMI (metering), and power transformers.”
James DeRosa, general manager, YESCO Electrical Supply, Columbiana, Ohio, says his company’s sales did not decrease year-over-year. “We maintained our sales because business never slowed down, and we ensured we serviced our contractors through the year of COVID.” He expects 2021 sales to increase by 10%.
Bruce Summerville, president, Inline Electric Supply Co., Huntsville, Ala., is also bullish for 2021, forecasting a 15% revenue increase. He says the company managed to keep all of its facilities open in 2020 (with proper precautions in place).
Bolstering business
Despite 2020’s tough economic conditions, Top 150 distributors continued to invest in their businesses. Some hired new employees to lead expansion in new market niches. For example, Parrish-Hare Electrical Supply, Irving, Texas, is now going after the water treatment niche and expanding in the residential market. Another such company is ATI Electrical Supply, Las Vegas, which is targeting the marine market in southeast Florida.
Other Top 150 distributors added branches, are building central distribution centers (CDCs), or are expanding existing facilities.
Joseph Borkey, president, PEPCO, Eastlake, Ohio, expects growth of 7% to 10% in 2021 after a year when the company aggressively invested in its operations to gain market share. PEPCO opened branches in Elyria, Warrensville Heights, and Warren-Youngstown, Ohio, and purchased certain assets of two Leff Electric/AMP Electrical Distribution Services. In addition, PEPCO launched a retail website; hired 25 employees; increased its vehicle fleet and construction site service packages; added more engineering capabilities; recalculated pricing models per customer type and product segment; streamlined warehouse operations; dedicated a facility manager to cover all locations; and added a “tool truck” to sales collateral for on-site demos and retail purchases.
Many companies were also building out their e-commerce capabilities and sales automation operations. YESCO Electric Supply’s DeRosa said his company invested in procurement automation.
Allied Wire & Cable, Collegeville, Pa; Crescent Electric Supply, East Dubuque, Ill.; G&G Electric Supply, New York, and PEPCO are four more of the nation’s largest distributors that either recently completed an upgrade or are now building new websites, online storefronts, and/or expanding their e-commerce platforms.
Overcoming COVID-19 challenges
Despite the optimism of many respondents and the impressive amount of business investment, Top 150 distributor executives agreed that 2020 was a challenging year. Steven Byrne, COO, Facility Solutions Group, Austin, Texas, says his company made the best of a tough situation and had significant gains in productivity as a result of reduced staffing due to furloughs and other reductions.
On the flip side of the coin, Rick Hall, president of General Pacific Inc., a utility specialist based in Fairview, Ore, said it has become “very difficult to find replacement personnel for retiring staff — even individuals with no experience. No one wants to work.”
The 150 distributors in this year’s ranking have tremendous clout in the market, with an estimated $74 billion in 2020 revenues and 7,912 locations in North America. Electrical Wholesaling estimates these companies account for roughly 72% of the $102 billion in electrical supplies sold through electrical distributors.
