Positive signs of a return to a semblance of supply-chain normalcy were mixed into a wide-ranging, growth-oriented, state-of-the-distributor presentation from Orgill CEO Boyden Moore.
Demand is way up, sales are way up and aggressive steps to help meet unprecedented customer demand have been eliminated or reduced, the CEO reported Wednesday.
Memphis-based Orgill has also fast-tracked the roll out of a new distribution center in Rome, N.Y. That's one of the distributor’s several responses to intense increases in demand produced during the global pandemic.
Speaking to Orgill dealers via Zoom during the company’s “E-Volution Fall Online Buying Event,” which runs through Sept. 4, Moore said Orgill is preparing for continued growth as its customers benefit from unprecedented pandemic-amplified share-of-wallet increases.
“Like the rest of the industry, Orgill experienced tremendous growth in demand from our customers since mid-March,” Moore said.
Second quarter sales showed dramatic increases in sales over the same quarter in 2019 in each of the distributor's business segments:
• Farm: Up 40.5%
• Hardware: Up 30.0%
• Home center: Up 27.0%
• Pro: Up 10.8%, and accelerating since the second quarter.
In 2019, Orgill sales hit $2.52 billion, up 3.2% from the previous year – and more than doubling from 2010 sales of $1.18 billion.
Taking the pulse of Orgill nation
During Moore's virtual presentation, the CEO used a digital survey tool to gain insights from Orgill dealers on a variety of topics. Here are the results:
What is your current expectation for sales in 2021?
• Up more than 10%; 39%
• Up less than 10%; 40%
• Down less than 10%; 16%
• Down more than 10%; 5%.
When do you think the Coronavirus crisis will subside?
• Q4 2020; 13%
• Q1 2021; 23%
• Q2 2021; 28%
• After Q2 2021: 36%
As we move forward from the pandemic, do you think uncertainly will:
• Speed up: 29%
• Continue about the same: 49%
• Slow down: 22%
Calmly and matter-of-factly, Moore laid out the steps the company has taken during the pandemic to keep products flowing in the face of intense demand. And he pointed to some "difficult decisions" made in the face of the supply chain crunch.
The company suspended conversion and new business opportunities as it addressed the surge. More than 200 store conversions were put on hold.
In two particularly hard-hit distribution centers — Inwood, Va.; and Sikeston, Mo. — Orgill suspended orders from non-primary customers and instituted maximum line counts. "We knew we needed to prioritize those customers with the strongest commitments to us," he said.
On Wednesday, Moore said he was happy to report that almost all restrictions on line counts have been removed, plus orders from secondary customers are being served as capacity has been increased in the past few weeks.
Also, conversions and store support efforts have resumed in the past 30 days.
Meanwhile, 600 additional distribution center employees have come online since June, and 200 more are expected. The additional manpower marks a 30% increase in total staffing at Orgill's distribution centers.
In addition to the distribution center under construction in New York, Orgill operates seven distribution centers, six in the United States and one in London, Ontario. These facilities supply retail customers in all 50 states, all Canadian provinces and 50 additional countries. In all, there are about 10,000 stores served by Orgill.
The company's new Rome distribution center is expected to begin operating in about 10 months – a full year ahead of the original plan. Moore also said Orgill is eyeing capacity expansion in the Western U.S.
“At Orgill we believe demand will remain high for home improvement longer, as more people invest in their homes, where they’re spending more time," Moore said.
A copy of Moore's presentation to Orgill dealers, in its entirety, is available here.