Foodservice Equipment Reports

Top Dealers Had A Very Good 2012

We’ve now toted up the results from our third annual Foodservice Equipment Reports Top Dealer Report. The 46 companies that verified their volumes this year had a very good year in 2012, at least on the top line as a group. The Top Dealers had combined revenues of nearly $4.4 billion last year; half of the group reported double-digit percentage gains.

Combined revenues increased 11.4% in 2012. This exceeds the combined revenue increase of 10.3% from the 44 dealers verifying their volumes for ’11 last year. In our first Top Dealer Report, 31 dealers reported a combined increase of only 1.4% for ’10. Combined sales last year of the 37 other leading dealers who reported, but did not verify, or that we estimated, grew an estimated 5.8%, though we, of course, have less confidence in these numbers.

The largest dealers in the U.S. have thus now experienced two consecutive years of strong sales gains coming out of the Great Foodservice Recession. And they have significantly outpaced growth of the broader industry in both years. Current FER estimates of the total E&S market have the market growing 4.7% in current dollars in ’11, slowing to 3.8% growth last year.

The Top Dealers also grew significantly faster than either the seven publicly reporting E&S companies John Muldowney tracks, which managed to grow combined revenues only 2.2% in ’12, or the annualized growth for the MAFSI Barometer, up 3.9% last year.

Why are the bigger dealers growing so much faster than the industry as a whole? As we suggested two weeks ago, there are a number of reasons: the chain orientation of many larger dealers, the growth of Internet sales and Internet-centric dealers, and the gradual consolidation of the industry.

The realities are that it’s getting tougher to compete as a distributor in the multiunit dominated U.S. market without some economies of scale. One has to buy and distribute efficiently, and invest in facilities, equipment, and in this era particularly, software. The successful dealers also invest in their people, in marketing, and in other “soft” assets.

But bear in mind another reality of the dealer channel. It remains a dynamic, people-oriented business, with a fairly low cost of entry. Our Top Dealer list is full of companies that have emerged just within the last decade or two. It’s a business that pays off for hard work, smart work. Not that it’s ever easy.

Thanks again to all of you that participated in our Top Dealer Report this year. We wish you another year of growth in 2013, on the bottom line as well as the top.

Cheers,

 

Robin Ashton

Publisher

rashton@fermag.com

Related Articles

First Impressions From This Year’s Top Dealers

SPECIAL REPORT: Most FER Top Dealers Saw Strong Sales In 2012

Top Dealers Posted Strong Growth Again In 2015