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FE&SEditorial Archives2006 — April

2006 Distribution Giants
Sun continues to shine on FE&S’ Top 100 as they record double-digit growth.

Click here to view the 2006 Distribution Giants.

FE&S’ 2006 Industry Forecast, which was released in January, participating equipment and supplies dealers looked into their crystal balls and predicted positive year-end growth for 2005. And the magazine’s annual Distribution Giants Study clearly supports their prognostication.

Sales for our Top 100 dealers increased by 10.4 percent in 2005, which comes on the heels of a rock-solid 8.9 percent growth in 2004. An impressive 10 dealers outpaced the overall growth of the Top 100 by recording sales volumes that represented an increase of more than 25 percent over their previous year’s volume.

Interestingly, dealers report that sales from commercial clients account for 84 percent of their revenue, which is up 11 percent over last year’s numbers. And among the commercial accounts, sales to independent operators increased to 65 percent of their revenues, representing a 3 percent bump over last year. Chain business accounted for the remaining 35 percent of dealers’ commercial sales.

Along those lines, dealers seem to be almost evenly split as to whether securing chain business is important to their long-term health. This is in sharp contrast to last year’s survey where 67 percent of the responding dealers deemed securing chain business essential to their long-term health.

During our 2006 survey, that number declined 16 points. The relationship between dealers and manufacturers is getting more and more solid. A firm 77 percent of participating dealers feel that manufacturers selling direct is not a primary competitive threat their firm faces. This does represent a 6 percent increase over last year’s survey, and bears watching in the years to come.

Summary Stats on the Top 100 Giants
Measure (bases vary by measure) Mean
Employees 128
SKUs carried 9,599
Locations 3
Active customers 3,948

While their supply chain relationships may be in tact, dealers still feel they operate in a very competitive and crowded marketplace. One such example is the fact that 59 percent of the Top 100 feel that a reduction in the overall number of dealers is essential for their margins to improve. This represents a 7 percent increase compared to the 2005 survey. In addition, 46 percent of those surveyed feel that the proportion of equipment purchases operators make through traditional dealers is on the decline and is something that also warrants watching in the years to come.

Not helping matters for dealers, or any other business for that matter, are soaring operational costs such as fuel, health insurance and postage. And in our survey, 95 percent of the participating dealers indicated these factors have a negative impact on their business.

The following pages provide a quick snapshot of the equipment and supplies industry’s Top 100 dealers, including how those companies fared during 2005.

Biggest Movers - Percent of Revenue
  Biggest Movers
Sales Volume
    2005 % Change
1 Kittredge Equipment Co. Inc. $24.5 88.5%
2 Hockenbergs Equipment & Supply Co. $49.5 85.4%
3 Kirby Restaurant Supply $28.0 40.0%
4 Curtis Restaurant Equipment Inc. $29.3 35.0%
5 Eastern Food Equipment $9.4 30.6%
6 Economy Restaurant Fixtures Inc. $69.1 29.2%
7 The Boelter Companies $138.0 27.8%
8 Hotel & Restaurant Supply $31.3 26.7%
9 Mission Restaurant Supply Co. $37.4 26.4%
10 Bargreen-Ellingson Inc. $105.0 25.0%

Biggest Movers - Total Dollars
  Biggest Movers
Sales Volume
    2005 % Change
1 The Wasserstrom Co. $383.0 $58.0
2 Edward Don & Co. $482.0 $52.0
3 TriMark USA Inc. $231.0 $32.0
4 The Boelter Companies $138.0 $30.0
5 Strategic Equipment & Supply Co. $275.0 $25.0
6 Hockenbergs Equipment & Supply Co. $49.5 $22.8
7 Bargreen-Ellingson Inc. $105.0 $21.0
8 Singer Equipment Co., LP $98.7 $15.7
9 Economy Restaurant Fixtures Inc. $69.1 $15.6
10 Hubert Co. $120.0 $14.0

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