Top 200 Distributors Say Lighting Retrofits and MRO Business Could Lead Recovery

June 10, 2011
Top 200 electrical distributors are starting to see pockets of growth in some key segments of the market. Few respondents had yet seen much growth in

Top 200 electrical distributors are starting to see pockets of growth in some key segments of the market. Few respondents had yet seen much growth in the residential market or in non-residential construction, but industrially oriented distributors said the industrial MRO business is starting to shine. Industrially-oriented distributors and distributors that focus on the green market and in particular lighting retrofits were among the most bullish distributors, according to data compiled for the 2011 Top 200 Electrical Distributors, which EW will publish later this month.

Many companies with particularly bullish 2011 sales forecasts had some common traits. They used the downturn to invest in their business operations, to focus on industrial MRO business in a big way, or to aggressively pursue market share. Timothy Berry, president and CEO, Kriz-Davis Co., Grand Island, Neb., said his company's diverse market focus kept it thriving during the downturn, and that they used the economic dip as an opportunity to revinvest in the firm with business systems, staffing and inventory. He is looking at a 15-percent increase this year.

Jeff Siegfried, president and CEO of Omni Cable Corp., West Chester, Pa., said during the recession Omni “systematically grew” within its defined customer base by taking market share. He sees 2011 sales growth topping 25 percent. OneSource Distributors Inc., Oceanside, Calif., has expanded on several fronts. Earlier this year, the company acquired D&D Tool and Supply, Vista, Calif., a tool and industrial supplies specialist, and Bob Zamarripa, CEO, said OnceSource has increased its focus on growth markets, selling supply chain services and using a new sales and management software reporting program it developed to focus its efforts on “actions related to capturing sales opportunities.”

Other companies are seeing signs the long-slumbering commercial construction market is starting to wake up and are capitalizing on the early growth. Scott Germann, CEO, Main Electric Supply Co. Inc., Los Angeles, expects 10 percent growth in 2011 for his company, ranked as the 79th largest electrical distributor on the 2011 Top 200. He said commercial projects were increasing in his company's Southern California market but that residential projects were still lagging.

Doug Borchers, vice president, Dickman Supply Inc., Sidney, Ohio, said the 2010 construction market was “abysmal,” but that the industrial and OEM (original equipment manufacturer) markets finished strong last year. He is bullish on 2011. “We expect at least 10 percent growth, (but) currently are running better than that. The energy efficiency market remains strong, as does the OEM machinery builder market.”

Two Michigan-based electrical distributors, Rock Kuchenmeister, owner of K/E Electric Supply, Mount Clemens, Mich., and Joe Schneider, president, Madison Electric Co., Warren, Mich., also see sales increases topping 10 percent in 2011, but, interestingly, the companies focus on totally different niches in their state. K/E Electric Supply goes after commercial construction for a much of its business, while Madison Electric has for years been a major player in Michigan's industrial markets. Kuchenmeister said general market conditions improved substantially after mid-year in 2010 and that so far in 2011, “Mid-sized contractor projects are off to a good start, with larger contractors lagging far behind (though they do show recent signs of improvement).”

Schneider wrote in his response that his company's 2010 sales benefited from a rebounding market and market-share gains, and that in 2011 the industrial MRO and OEM markets are growing but that construction business is still slow. Madison Electric is one of the Top 200 distributors already selling supplies for electric-vehicle (EV) charging systems.

More than two dozen other respondents said they are also already into the EV market. EW asked Top 200 distributors if they already stocked the following newer technology products: EV chargers, LEDs (other than for use in exit signs or flashlights), home theater systems, backup residential generators, components for wind farms and photovoltatic products. LEDs were by far the most common of these products already on the shelves of electrical distributors, with 105 distributors already stocking, followed by residential generators (56 companies); photovoltaic products (35 companies); home theater components (37 companies); and supplies for wind farms (26 companies). Respondents said they were getting the most questions about LEDs and photovoltaic products (in that order) from customers.

Strictly by the numbers

With an estimated $44.9 billion in sales, EW estimates Top 200 distributors controlled 56 percent of the $80.1 billion in 2010 sales through electrical distributors. According to EW estimates, these 200 companies had 44,314 employees, 4,575 branches and average sales-per-employee of $624, 204.

EW's Top 50 Electrical Distributors

Rank Company City 2010 Sales 1 Sonepar North America* Paris, France 5,238,000,000 2 WESCO International Inc. Pittsburgh 4,880,835,000* 3 Rexel (Rexel/Gexpro)* Dallas 4,793,000,000 4 Graybar Electric Co.* St. Louis, MO 4,616,377,000* 5 Anixter International Skokie, IL 3,889,400,000* 6 Consolidated Electrical Distributors Westlake Village, CA NA 7 Border States Industries Inc. Fargo, ND 1,025,000,000 8 W.W. Grainger Lake Forest, IL NA 9 HD Supply Atlanta NA 10 Crescent Electric Supply Co. East Dubuque, PA 768,882,644 11 Mayer Electric Supply Co. Inc. Birmingham, AL 568,123,380 12 City Electric Orlando NA 13 Platt Electric Supply Beaverton, OR NA 14 Dealers Electrical Supply Co. Waco, TX NA 15 State Electric Supply Co. Huntington, WV NA 16 McNaughton-McKay Electric Co. Madison Heights, MI NA 17 Reynolds Co., The Fort Worth, TX 387,000,000 18 Independent Electric Supply Inc. San Carlos, CA 373,000,000 19 Elliott Electric Supply Nacogdoches, TX 370,477,807 20 Wholesale Electric Supply Company of Houston Inc. Houston NA 21 Kendall Electric Inc. Portage, MI 345,000,000 22 North Coast Electric Co. Seattle 344,000,000 23 OneSource Distributors* Oceanside, CA 340,000,000 24 Turtle & Hughes Inc. Linden, NJ 329,400,000 25 Houston Wire & Cable Houston 308,522,000 26 Summit Electric Supply Albuquerque, NM 301,500,000 27 Kirby Risk Electrical Supply (Kirby Risk Corp.) Lafayette, IN NA 28 Walters Wholesale Electric Signal Hill, CA NA 29 Omni Cable Corp. West Chester, PA 213,000,000 30 ECHO Electric Supply (ECHO Group Inc.) Council Bluffs, IA NA 31 Van Meter Industrial Cedar Rapids, IA NA 32 Rumsey Electric Co. Conshohocken, PA 188,000,000 33 Steiner Electric Co. Elk Grove, IL NA 34 Eck Supply Co. (Eck Enterprises) Richmond, VA NA 35 Codale Electric Supply, Inc. Salt Lake City NA 36 Dominion Electric Supply Co. Inc. Arlington, VA NA 37 Industrial Electric Wire & Cable (IEWC) New Berlin, WI NA 38 United Electric Supply Wilmington, DE 164,494,947 39 Dakota Supply Group Inc. Fargo, ND NA 40 Werner Electric Supply Co. Neenah, WI NA 41 Shepherd Electric Supply Baltimore 152,403,000 42 Colonial Electric Supply King of Prussia, PA 152,000,000 43 Kriz-Davis Co. Grand Island, NE 143,117,000 44 WinWholesale Inc Dayton, OH NA 45 Standard Electric Saginaw, MI NA 46 Werner Electric Cottage Grove, MN 130,000,000 47 3e Electrical Engineering & Equipment Co. Windsor Heights, IA NA 48 Gresco Utility Supply Inc. Forsyth, GA 126,500,000 49 QED Inc. Las Vegas, NV 126,171,544 50 Springfield Electric Supply Co. Springfield, IL 122,800,000 * North American sales