Canadian Electrical Wholesaler

June 30, 2020

LDS CS q2 pulse 400Channel Marketing Group’s 2020 Q2 Pulse of Lighting Report projects that the lighting market, through electrical distribution, contracted by 20%.

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.
  • While a 19% decline is significant, this is in light of a number of major markets having construction stopped for an extended time. April’s performance, anecdotally, was worse, however, due to the bi-coastal nature of COVID-19 in the beginning, performance in other regions supported the lighting industry. Distributors, and businesses in general, accelerating growth in May and June helped flatten the decline.
  • No market segment was overly busy, with most reporting “okay” except large to mid-sized renovations.
  • Inventory levels remained the same. There is some evidence that conglomerates and Tier 2 companies may have picked up some stocking positions from Asian imports. This could be timing due to Chinese New Year, COVID-19 supply chain issues from China (product availability) and especially Tier 1 companies seeking to focus on this area.
  • Backlog declined by 50% for 25% of respondents. 40%, surprisingly, reported, backlog increased, however, feedback is that this is due to projects being delayed due to COVID-19.
  • Q3 outlook is for a nominal 2% increase, essentially flat. This performance correlates with results found for the broader electrical distribution market in our 4thCOVID-19 Electrical Market Sentiment Report that covers May performance and June projections.


  • Manufacturers reported a 19.8% decline with only 14% of respondents reporting flat / any growth. 20% reported declines of 31%+.
  • Manufacturer expectation for Q3 is for -2.5%
  • Insights shared by manufacturers include
    • Continued pricing pressure which is inhibiting them from seeking price increases / margin improvement.
    • Project delays
    • Supply chain issues impacting product availability. Mostly this has been COVID-19 in factories.
    • Some suppliers had projects pulled forward as contractors sought to complete outside work

Manufacturer Reps / Lighting Agents

  • Sales agencies reported a decline of 19.4% with 23% reporting flat and over 30% reporting a decline of 31+%
  • Q3 expectations are for a decline of 6%
  • Marketplace insights included:
    • Access to customers inhibits the specification process.
    • Stock business down due to distributor counters being closed
    • Activity in the residential home builder market and for small renovation

UV-C lighting

  •  Each audience was asked about UV-C lighting, which has recently been in the news due to its potential to kill 99.99% of the COVID-19 virus.
  • About 40% of distributors are receiving requests for UV-C lighting and 67% of agents have a line that has a UV-C offering, however, less than half shared that they are getting a significant number of requests.
  • The challenge appears to be that this product offering needs to be promoted to the applicable end-user markets to stimulate interest and demand. This represents a distributor opportunity. It is expected that the profitability potential in this segment will decline as more suppliers begin to provide the offering, hence competing for limited business.

Project Activity

  • Each audience was asked about their project activity based upon the project ship date to gain a sense of future activity as there is concern in the industry regarding late Q3 and Q4 projects given increased delays and some cancellations.
  • Feedback from all three audiences confirmed that project quotation activity is “fair to okay” through Q1 2021 with less insight further into 2021. Q3 is “fair to good” as it is deemed “short-term”.

Overall, given the state of Q2, worse was feared by many (and some have had much worse). The decline was mitigated due to new construction activity, COVID-19 being bi-coastal and therefore activity continued and the reopening of the economy. The outlook is concerning due to continued COVID-19 concerns, workplace social distancing rules, supply chain delays, project delays, investment funding for new construction and companies that may have been considering renovations or capital investments redirecting funding to supporting payrolls and PPE investments.

Lighting represents 15-30% of distributor sales, and 25% of overall industry sales, so, “as goes lighting goes the industry for many.”

Click here to purchase the complete copy of the 2020 Q2 Pulse of Lighting Report

A complimentary copy of the report is provided to survey respondents.


Pulse of Lighting is originally published by Electrical Trends

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