ASI Market First Quarter Industry Sales Up 3.4%

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First Quarter Industry Sales Up 3.4% A new ASI survey of distributor firms reports that industry sales increased 3.4% in the first quarter of 2008 compared with sales from the first quarter of 2007. The percentage translates to an increase of $136 million compared with last year's numbers, based on the 2007 industry revenue number of $19.6 billion and the Counselor State of the Industry estimate that 20.4% of sales occur in the first quarter. The survey, though, also reports that distributors are becoming a bit more pessimistic about the market right now. The number of distributors who reported quarterly sales increases fell from 52% in fourth quarter 2007 to 47% in the first quarter of 2008. In fact, Q1 2008 marked the third consecutive quarterly decline in the number of distributors reporting year-over-year sales increases. However, 59% of distributors said that they expect to increase their overall sales in 2008 vs. 2007.
Frank Seidelmann, owner of New Jersey-based Sherri Advertising (asi/325490) is one distributor that reported slow sales in Q1 2008: "My customers are insurance agents and service people that have to use their vehicles to do business and the economy is hitting them and in turn it's hitting us," he said. On the other side of the coin is North Carolina-based The Solutions! Group (asi/329812), which does much of its business with incentive programs and company stores. "We are seeing tremendous growth in sales," says President Kathleen Simon. "Right now we are seeing an increase in our first quarter of 14.18%. We are very, very pleased and see nothing but bright things on the horizon."

Chuck Fandos, president of Top 40 distributor Gateway CDI (asi/202515), thinks the 3.4% increase is an accurate reflection of industry sales – and almost exactly matches his company's own 1st quarter figures. But he also understands why some distributors would be surprised by the figure. "I would call the market a little uncertain right now," he says. "There's a lot of activity but not a lot of decision-making going on right now. But I think last year was a tremendous year and the fact that Gateway is up 3% is pretty good because we were up 15% last year. The suppliers in our industry that I've been talking to say their business is strong. I think the industry is fairly healthy compared with the rest of the economy."