Distribution GIANTS 2005
From overall sales results to emerging trends, our editors examine some of the key issues affecting today’s dealer community.

Welcome to our annual look at the foodservice equipment and supply industry’s Giants of Distribution. The following pages take an in-depth look at our industry’s biggest dealerships, including how the individual companies that comprise FE&S’ Top 100 fared in 2004.

At the time data was collected for FE&S’ Industry Forecast 2005, most dealers were waiting for their fiscal year to close. Despite not having final numbers, though, an impressive 87% of the dealers surveyed felt that an improving economy would help them meet or exceed their revenue goals for 2004. That line of positive thinking proved to have some merit as total sales for FE&S’ Distribution Giants posted an increase of 8.9%.

For our Top 100 dealers, the commercial segment accounts for an average of 73% of their total sales, up 3% from 2003. Along those lines, 67% of the Top 100 dealers feel that acquiring or retaining chain business is essential for their firm’s long-term health. This is an interesting contrast because the study also shows that on average the Top 100 dealers derive approximately 38% of their commercial sales from chains. Although chain business remains very attractive for many dealers, it appears that independents will continue to comprise a plurality of their sales for the time being.

Fighting off margin erosion remains a challenge for dealers of all sizes. That is why it is interesting to note that 52% of the Top 100 feel a reduction in the overall number of dealers is necessary for their margins to improve. In addition, 54% say the increase in the price of stainless steel has had a negative impact on their business.

On a more positive note, dealers in the Top 100 are showing signs that their relationships with industry manufacturers remain on firm ground. A solid 71% of the Top 100 feel that certain manufacturers’ decision to replace traditional volume-based discounts with functional ones will have a positive impact on their business. In addition, only 18% feel the primary threat their firm faces is from manufacturers selling direct.

View the FE&S Distribution Giants 2005