Canadian Electrical Wholesaler

Apr 15, 2020

Canadian Electrical WholesalerBy John Kerr

At times like this I miss my father. Those men of his time were thrust into uncertainty and challenged so greatly. They survived and thrived and lived on... just like the Canadian electrical industry will.

My father at times like this would always have the right thing to say. Given our team perspective and if he were here, he would say, “It’s always darkest before the dawn.”
These are troubling times, confusing times, and times we would like behind us now.

The team at Kerrwil and Canadian Electrical Wholesaler wanted a Canadian perspective on where we are, and we wanted a view from the perspective of the agent, the electrical distributor and electrical manufacturer for the past several weeks.

Last week our friends at Electrical Trends, under the leadership of David Gordon along with DISC Corp., launched a US-focused survey which was very insightful and some of what we have done is based on their approach to allow a Canada-US perspective. Their survey had 429 respondents across distributors, agents and manufacturers.

We wanted to understand the impact and the actions taken by the Canadian electrical industry over the past several weeks. Herein we built three specific studies targeted to the audiences but with as many common questions as we could. With 223 responses in total, we had a solid cross section of the industry: 54% electrical distributors, 27% manufacturers, and 19% agents.

Table 1: Responses by Segment
Responses by Segment

 

 

 

 

 

 

 

 

 

The electrical distributor perspective

Overall, across Canada electrical wholesalers are down on average 21.4%, with 51% reporting a decline of 30% or more. 86% of the distributors that responded reported over 10% or more.

Table 2: The Distributor Perspective
The Distributor Perspective

 

 

 

 

 

 

 

 

 

 

 

 

The survey does represent a solid cross section of multinational, national and regional distributor brands, with 62% representing senior leadership, corporate and branch management.

Table 3: Role of Distributor Respondents
Role of Distributor Respondents


















While Ontario dominates the responses — Ontario and Quebec represent 58% of the market in Canada — both markets have tended to report the largest declines. The west has been impacted somewhat less.

Table 4: The Distributor Respondent by Province
The Distributor Respondent by Province

 

 

 

 

 

 

 

 

 

 

 

 

 

The distributor response

Adapting to the current reality, electrical distributors are offering numerous responses to support their businesses. 86% implemented curbside pick ups alongside closing counter areas while 14% are closing branches. We noted several comments where some electrical distributors are in fact keeping their current planned purchasing in place and not reducing inventory alongside those who are preparing work sharing programs and some even extending their hours, creating shifts for order preparation as they are reacting to electrical contractors who also are spreading out their work to minimize staffs on site at any one time.

Table 5: Canadian Distributor Actions
Canadian Distributor Actions

 

 

 


















Another key thing to note was that staff has been impacted on many fronts through implementation of work-at-home strategies, compensation adjustment, and layoffs. We are surprised to see how in Canada 48% of the respondents indicated a move to professional development training while that number was just over 30% in the U.S. study mentioned earlier.

Finally, on the distributor front 42.8% of respondents indicated that they have been asked by customers to extend credit and defer payments.

The manufacturers’ view

Overall, at this stage the manufacturers have faired a little better at 17.5% down, but comments made alongside the study anticipated greater decreases closer to May. The sentiment of many was that sales though the third week of march held up well compared to last year, with a definite softening in week 4 and through mid April.

The profile of respondents show a solid cross section of manufacturers from the larger multinationals through to the smaller local manufacturers. As one might expect, Ontario-based manufacturers dominated the response at 76% with Quebec at 17%.

88% of the responses were from senior management, ownership.

The manufacturers seem to have jumped on the video conferencing method and moved to weekly or daily staff meetings. Increased spending in online strategies seems to have taken hold as well, while 38% have had to address staff levels.

Of note only 18% had take advantage of Canadian government programs at this point. The table below details all actions taken by manufacturers.

Table 6: Manufacturer Actions
Manufacturer Actions



















The agents’ view

The agents fall right in the middle of the negative impact at 21.4% down so far. 45% of the respondents were from Ontario and Quebec, with Western canada representing 33%, Senior management corporate leadership and ownership.

Agents were a bit more reserved in their personal comments on the current scenario, with many working hard to make sure any time they do have is spent at the client. Many indicated too, a move to be more proactive in online training and product knowledge while working hard to keep their teams in place and together. Of note 43% have indicated they have taken advantage of the Canadian Government programs.

The table below details the actions by agents.

Table 7: Agents Actions
Agents Actions


















So how does this effect the final numbers for this year?

The second quarter of the year has over the past several years as measured by Electro-Federation Canada and reported in PATHFINDER represented 24.7% of the year. Quebec has typically been about 1% higher while the Prairies 1% lower.

For the full line distributor in this quarter would approach $2 billion (Canadian) and for the entire market closer to $2.8 billion (Canadian).

While this study did not look beyond today, we sense it has given a view that may indicate a sense of the impact. With sales through Q1 in good shape compared to the year previous, we estimate the worse case scenario for a reduction of sales through to June could approach $600 million or a 9% contraction for the full line distributor segment on an annual basis. Remember this is a full line distributor segment view and assumes no contraction through the balance of the year or no further disruptions.

That said, our sister platforms Electrical Industry and Le Monde de L’Electricite are talking to electrical contractors frequently and the take-away from those discussions speaks to the slow introduction of staff back to work sites with a need to have staff working longer hours post the return to normal, taking advantage of the weather. Quebec as many know has shifted its summer break schedule already.

Another comment we hear too is many contractors feel they could in fact be short staffed as they try to push the pending work through the system before the year’s end. We have heard too as noted earlier many distributors are holding the line on product in inventory to have it ready for the possible increase in demand when the pendulum swings.
The market will be challenged to meet the bar set last year for sure, but it is possible, and the innovation and flexibility shown by the industry so far sets the foundation in place for that possibility.

John Kerr is Publisher of CEW; This email address is being protected from spambots. You need JavaScript enabled to view it.

       Partnering For The Next Step                                                                     

Siemens CanadaWelcome to the Digital Enterprise Virtual Summit brought to you by Siemens

How quickly can you react to changing conditions and demands in your market? How can you ensure your production will run securely at any time in the future?

Industry’s digital and technological transformation is the answer for meeting today’s and tomorrow’s challenges and market needs.

With the right digitalization and automation solutions, expertise won from practical experience, and a partnership approach that benefits all involved parties.

To explore these possibilities, we’re bringing together top-level speakers, specialists and decision-makers from various industries and experts from Siemens to the Digital Enterprise Virtual Summit under the motto “Partnering for the next step.”   

This virtual summit will be an interactive digital event featuring first-hand experiences and success stories achieved with industrial digitalization and automation solutions, and cutting-edge technologies.

Join us on July 16 and learn from customers and experts how you can respond efficiently, flexibly and safely to the changing market environment.

To cover as many different time zones as possible, we offer two almost identical live sessions – you can also watch them on demand at your convenience:

Sessions runs from :  9:30 am to 2:15 pm ET (3:30 pm to 8:15 pm CEST)


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John JefkinsBy John Jefkins

In 2011, I started working in the electrical arena and quickly noticed that there was a high employee retention rate within the industry. Today, I regularly engage with Electro-Federation Canada members with 20, 30 and even 40 plus year tenures. Other industries I had worked in previously, such as telecommunications, had higher turnover rates.

Our industry faces an increasing need for talent, with new retirements and product/process innovations and modernization driving the need for specialized roles — some not even known yet.

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Digital Twin MarketA recent Markets & Markets report estimates the Digital Twin market will grow from US$3.8 billion in 2019, to US$35.8 billion per year by 2025, at a CAGR of 45.4%. Digital Twin software is already revolutionizing industries such as healthcare, architecture, aerospace, defence, and automotive and transportation.

Furthermore, the global smart infrastructure market, which includes the Digital Twin sector, is expected to thrive at a considerable CAGR between 2020 and 2025 as demand for the smart infrastructure has been a booming year on year, reports Market Research Explore - details. 

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PNNL StudyBy Craig DiLouie

The U.S. Department of Energy has released the results of a study examining authentication vulnerabilities in connected lighting systems (CLS). Particularly as emerging CLS incorporate distributed intelligence, network interfaces and sensors, they can serve as data-collection platforms that enable a wide range of valuable new capabilities as well as greater energy savings in buildings and cities. However, CLS technology is currently at an early stage of development, and its increased connectivity introduces cybersecurity risks that are new to the lighting industry and must be addressed for successful integration with other systems.

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David GordonBy David Gordon

COVID-19 has heightened the benefit of, and interest in, eCommerce for electrical distributors. Our second and third COVID-19 Electrical Market Sentiment Reports have shown that those with an eCommerce offering have seen online sales increases. Further, from conversations with distributors, their site activity increased. The benefit is that these companies had lower sales declines (and some increases), and were able to better serve their customers.

A further benefit is that their remote workforce had access to an online resource, other than manufacturers, for quick, easy, product research.

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The survey, conducted the third week in June, received responses from 164 individuals who equally represented industry stakeholders.

Distributor Performance
Very few distributors reported either flat or positive performance with over 30% reporting declines of over 30% for the quarter.

 

 

 

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Due to the rapid development and generational changes of LED technologies the timing is perfect to launch the EiKO Marketplace as an outlet to sell high quality, value-priced products.

 

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LevitonLeviton Canada is pleased to announce the nomination of Thomas Supinski as Sales Director for Alberta and the Prairies as of June 1st, 2020, as Julie Marineau will be moving to Montreal along with her family. Julie will be promoted to Vice-President, Retail at Leviton Canada’s head office.

Thomas has been residing in Calgary since 2003 and has a deep understanding of the regional market and its specific needs.

 

 

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Anju UddinBy Blake Marchand

Sonepar is excited to introduce Anju Uddin as the new Marketing Manager for their Ontario Region! Anju has more than 15 years of experience as a marketing expert, which includes running an independent agency working with a multitude of businesses in various industries and geographies from around the globe. 

With a passion for reinvention and finding success through a commitment to education and innovation, Anju has utilized her exceptional creativity and business acumen to engineer seamless brand experiences...

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