Distribution Giants 2002: Re-Setting A Course For Growth
By The Editors
In this web-exclusive continuation of our 2002 Distribution Giants report, we present five additional charts that describe surveyed dealers' size, customer rolls, market scope, growth factors and extent of internet involvement.
As mentioned in our April 2002 print feature, the largest number of our respondents (23%) stated that they employ 41 to 121 staff, while another 22% said that their employees number between 25 and 40. At the far ends of our scale, 14% of responding dealers noted that they have 121 or more staff members, while only 8% said they employed as few as 11 to 24 workers. Clearly, our Top 100's sales growth is being supported by increases in staff size, raising competitive pressures on smaller dealerships.
Although a solid majority of this year's Distribution Giant respondents professed that they did business with a mid-range number of customers in 2001 - as evidenced by identical 16% totals for those serving 500 to 1,999 accounts and those citing 2,000 to 4,999 - it is again worth noting that more respondents (13%) served an above-average number of customers (5,000 or more) compared with those below our reported average - only 9% said that they were actively involved with 500 or fewer accounts.
Among the member-firms of our Top 100 that reported 2001 sales increases, 18% attributed their growth to a rise in business in targeted market segments, while an equivalent total credited their larger volumes to staff's ability to work harder or more efficiently. Other key growth-drivers noted by our respondents included technology upgrades, local economic factors and an increase in bid work (all listed by 13%). Some 12% of respondents stated that employee training (undoubtedly intended to improve productivity) was their ticket to sales growth last year, while 11% pointed out that new/expanded facilities or the addition of sales staff had been responsible for their volume increases.
It is noteworthy that by far the largest number of our respondents (38%) described their dealerships as regional (active in more than one U.S. state), while less than half that number (18%) noted that they did business on a national basis, and just half that figure (9%) stated that they were active "locally" or in just one metropolitan area.
Is e-commerce slowly stirring back to life in foodservice E&S? Although, as Chart E1 describes, fully 57% of responding Distribution Giants are still making no web-based purchases from manufacturers, some 16% are now buying anywhere from 1% to 20% of their products online. The situation looks quite a bit more positive when our Top 100 were asked to report the number of customers with whom they did business over the internet in 2001. In this instance (Chart E2), while 44% said they were doing no web-based business at all with end-user operators, 41% noted that from 1% to 20% of their total transactions with customers occurred last year online. With the economic outlook now steadily brightening and e-commerce standards now available in our industry, it seems likely that internet transactions will soon increase significantly in foodservice E&S.
