Darkest Before the Dawn, Part Two

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May 6, 2020

John Kerr

I spoke in my previous article about my father’s quote darkest before the dawn. Well, he had another saying clearly brought forward by his growing up in the depression. He would say, “Money is not everything. It just helps,” and at a time like this when there are so many storylines of effort above and beyond the call, and so many initiatives underway by electrical distributors, there will be a rallying right across the country. The electrical distributors are moving, reacting, and more adaptable than ever before.

The current situation we find ourselves in is to say the least fluid, dynamic and somewhat disconcerting for many, but underlying it is a focused, disciplined approach to addressing the new norm and new reality. Some branches remain closed, some open with minimal staff, and others rotating staff and working differently than ever before.

Recent public reports by Wesco and Rexel have indicated drops approaching 23% through mid April and clearly ones that demonstrated a slowdown from mid March. Our discussions with both distributors and end users/contractors alike confirm their buying and purchasing activity were curtailed more aggressively in early April.

Over 106 electrical distributors responded to our recent survey with 73% from corporate and branch management.

The numbers tell the dollar toll easily, and in the context of what is around us all regardless of jurisdiction nothing will surprise. But what is telling are the action plans and communications strategies.

The electrical distributors management and leadership in Canada achieved an 82% weighted average score on how they communicated to employees. In fact, over 56% of survey respondents gave their leadership a 90% plus.

Canadian electrical distributors are virtually split as to the federal and provincial COVID-19 measures to support Canadian business with wage subsidies, loans, and deferred tax payment,) with 52% of respondents indicating that they are making use of the government support; 65% say that overall the government support plans are in fact helpful to their respective companies.

Not standing still, 85% of the electrical distributors surveyed have indicated they are well underway with their respective plans for a recovery. In that light many took the time to give us some insights on what they are doing and planning to move forward from the current scenario.

A clear majority have indicated a move to more online customer interfacing, changing the branch layouts and customer pick-up areas, paying greater attention to safety measures, and restricting the number of people in the branch while protecting counter staff. Of note, more firms aim to be more aggressive in their respective local markets while driving new ways of interacting with their customers. Finally, another action that was evident is a recasting of roles and responsibilities for staff to better adjust to the branch requirements moving forward.

What we have also heard and sensed from our research responses too is more quoting activity right across Canada at a pace that is much greater than the same time last year.

In speaking with the industry as whole, one other concern lurks quietly in the background — disruptions in product supply for some products. Global supply chains are affected greatly now as we know, but plant closings in Mexico too are possibly going to affect the availability of product here; coupled with the anticipated rebound in the US through Q3 and Q4, distributors have beefed up their inventory investments through the past several weeks.

The following tables detail the results of the second Canadian Electrical Wholesaler survey.
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John Kerr is Publisher of CEW; johnkerr@kerrwil.com

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