Grainger (NYSE: GWW), a broadline distributor of maintenance, repair and operating (MRO) products serving businesses and institutions, is hosting an Investor Day at the company’s Northeast Distribution Center in Bordentown, New Jersey. The company provided a strategic update and multi-year financial outlook with financial targets through 2025.
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Assuming normal economic growth, Grainger anticipates sales will fall between $19 billion and $20 billion by 2025. These figures represent 8% to 10% compounded annual growth compared with the mid-point of 2022 guidance of $15.1 billion.
Since Grainger’s 2017 Investor Day, the company reports it has progressed by:
- Consolidating its portfolio, divesting smaller, unprofitable businesses and re-segmenting the business
- Focusing on executing the company’s strategy in both high-touch solutions and endless assortment.
- Managing through the pandemic and continuing to serve customers well
- Investing in technology to support growth in both segments
- Transforming the company’s culture
“We have made significant progress over the last several years by starting with the customer and focusing on what matters to drive strong results. With a commitment to provide a flawless experience and tangible value for our customers, we are gaining momentum and remain well-positioned to create significant shareholder value by delivering on our financial targets over the next three years,” said Grainger CEO D.G. Macpherson.
Grainger expects strong revenue growth from both of its core segments through 2025: including a 6-8% CAGR in High-Touch Solutions N.A. and a 16-18% CAGR in Endless Assortment. These targets imply revenue CAGR of 8-10% over the coming three years.
High-Touch Solutions N.A.
Grainger estimates its market share for this segment is 7% or $11 billion of the North American B2B supply market, which the company estimates at around $1.4 trillion. Grainger estimates the addressable market to be $165 billion, according to its investor day presentation.
The company’s strategic growth engines for the High-Touch Solutions N.A. market include:
- Merchandising
- Marketing
- Seller Coverage
- Seller Effectiveness
- Customer Solutions
Endless Assortment
Grainger estimates the total Endless Assortment U.S. B2B supply market to be roughly $1.2 trillion, with the addressable market at $500 billion. The company estimates its market share of Zoro and MonotaRO to be approximately $1 billion of that.
Grainger currently offers its customers more than 10 million unique items. The company announced that it plans to add approximately 2 million items per year for the next several years in its Endless Assortment business.
The company’s assortment has driven a 163% increase in organic web traffic since 2018. In addition, by making improvements to its marketing and ecommerce experience, Grainger has seen a daily 25% increase in B2B customer purchases and a 45% monthly increase in B2B customer purchasing frequency since 2018.
