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Top 25 Wholesalers

Debra Chanil, EnsembleIQ
10/4/2010

Price inflation and push into foodservice drive sales growth for leading distributors

Sales at the top 25 convenience wholesalers combined to reach $53.9 billion in this last fiscal year, according to the latest Convenience Store News Top 25 Wholesalers report. This 7.4-percent increase constitutes an added $3.7 billion in sales for these wholesalers, helping to push the top 25 to a new sales peak.

However, this news is tempered by the fact that some of this gain can be attributed to price inflation in key categories. In particular, the cigarette category, which accounts for more than 70 percent of sales for these top wholesalers, saw several price jumps in the past fiscal year. Likewise, the candy and salty snack categories, which combine for more than 5 percent of total sales, also saw manufacturer price increases during the year. Finally, foodservice prices rose as well; this category has been cited by many of the top 25 players as an area of focus and expansion over the past several years.

This year’s report shows the same 25 players as last year. Rankings for the top five wholesalers are identical to 2009. McLane Co. remains firmly entrenched at the top of the list with sales of $26.6 billion, a 9.9-percent increase over last year’s results. Core-Mark Holdings Co. Inc. added 8.0 percent in sales to stay in second place, with sales totaling $6.5 billion for its last fiscal year. Eby-Brown Co. reached $4.5 billion, and rounding out the top five are H.T. Hackney Co. at $3.6 billion and GSC Enterprises at $1.2 billion.

Fig. 1 Top 25 Wholesalers Summary

Fig. 2 Sales Per Retail Location Served

Fig. 3 Sales per Full Time Employee (in millions)

Fig. 4 Sales per Delivery

Fig. 5 Number of SKUs Handled

The first change in position on the chart from last year comes at No. 6, with Harold Levinson Associates Inc. moving up one spot from last year. The company reached $1 billion in sales from a 17.2-percent increase. S. Abraham & Sons Inc. dropped one spot to seventh place, with sales of $977 million, a 6.9-percent increase. Imperial/Harrison Super Regional moved up one spot (as it did in last year’s report) to eighth place, as an increase of 9.4 percent pushed its sales to $875 million. Amcon Distribution Co. dropped back a single place to rank ninth, with sales of $871 million, up 6.1 percent. Finally, we see a repeat in 10th place for Forrest City Grocery

Acquisition activity heated up in the wholesale industry again during the last fiscal year.

Co., with sales of $772 million, up 2.9 percent.

These 10 companies combined for sales of $46.9 billion, 87 percent of the total top 25 sales (compared to last year’s share of 86.9 percent). After lagging behind last year with a sales gain of only 3.8 percent compared to 5.2 percent for the total, this year’s top 10 improved their game, closing the gap against the overall top 25 by a tenth of a point - the top 10 saw a sales increase of 7.3 percent compared to 7.4 percent for the total 25.

Acquisition activity heated up in the wholesale industry again during the last fiscal year. Last year’s report showed two of the top 25 involved in some M&A activity; this year the tally is up to five players. Core-Mark is acquiring Finkle Distributors, Johnstown, N.Y. Harold Levinson Associates acquired House of Oxford Distributors of Somerset, N.J. Imperial/Harrison SuperRegional acquired Union Grocery, New Albany, Miss. Amcon Distributing acquired Discount Distributors, Springdale, Ark. And finally, Consumer Products Distributing Inc. made two acquisitions: Lasco Distribution, Mattapolsett, Mass., and TBI Corp., Manchester, N.H.

While the majority of sales continue to come from convenience chains, these wholesalers are increasing their sales to single stores. Currently, the top 25 sales breakdown is: 52.6 percent from chains vs. 47.4 percent from single stores. Last year, that figure was 53.9 percent from chains vs. 46.1 percent from single stores.

A total of 60 percent of survey respondents reported expanding product categories offered in the past year. Chief among these categories were foodservice; produce and other fresh offerings; bread; milk; beverages; and natural/organic selections. Only one respondent reported eliminating any categories during the past year.

When asked to name the top challenge faced by their business in the past year, there was little surprise that the top answer was the economy. More specifically, here’s the top challenges mentioned by the leading 25 wholesalers:

  • Acquisition integration
  • Competition from Native Americans
  • Consolidation within the manufacturing sector, government intervention with business
  • Credit management
  • Lack of inflation
  • FDA and legislation
  • Federal and local taxation, particularly of tobacco
  • Government regulations
  • Higher excise taxes
  • Increased operating costs
  • Increased tobacco taxes coupled with decreasing consumption
  • Slow inventory turns at the

While the majority of sales continue to come from convenience chains, these wholesalers are increasing their sales to single stores.

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