April 4, 2022
Over the past few weeks Channel Marketing Group conducted its quarterly Pulse of Lighting survey. This quarter’s survey attracted over 230 responses from electrical / lighting distributors, manufacturer reps, lighting agents, and lighting manufacturers.
While growth, for lighting, continued to be “strong”, the performance lagged the overall electrical industry for the first quarter according to the latest DISC quarterly report (which, if you do not subscribe, you / your company should … and if you want to know why, contact me or, if you are a manufacturer, ask one of your national chains).
Overall, lighting’s average performance was high single digit / low double digit, however, if your lighting business is not up at least 6% your trending backwards as the feedback is that realized price gains averaged 5-6%, with more price increases forecasted for Q2. Q1 results are a slight improvement from the 2021 Q4 report.
But there are bright spots as the market is very uneven with a number of respondents reporting 20+% growth. The inference … geographically the market is very uneven for distributors and reps whereas, in the manufacturing community, the business is moving around.
We’ve noticed a trend more towards branded companies; however, we know some small manufacturers who have had strong months because they won a few projects. The smaller a company, the more they may tend to have volatile sales swings, same for smaller distributors, as these companies do not have much, if any, “stock and flow” business and are challenged in repetitively winning smaller discretionary business on a frequent basis (to substitute for stock business.)
2022 Q1 Pulse of Lighting Report Highlights
- Average growth in low double digits
- Growth remains mid / small size projects with some seeing a number of “new” in these sizes
- With the growth in the renovation space, “stock / flow”, or white goods, suppliers are doing better than spec focused suppliers.
- Inventory levels staying similar, although some distributors are increasing when can to take advantage of supply chain opportunities
- Brand name manufacturers benefiting from line changes and companies that are solely importers are “struggling”
- Backlogs continue to be elevated
- Q2 expected to slow a little, but could change based upon fulfillment of back-orders
- True “longer-term” growth could be masked based upon back-order fulfillment. This will help distributors if the economy slows.
- Price increases continued … and are expected to continue into next quarter
- Supply chain issues persist … impacting deliveries as well as lead-times.
- Distributors report, through some follow-up calls, that they see Acuity taking some share and that Signify is having issues with drivers as well as labor issues in Mexico.
- Growth a lower than distributors, however, this is most likely due to margin differences and possibly business mix and/or ability to ship orders to therefore recognize the sale.
- Q2 hoping for a little better … don’t know if booked sales or fulfillment of backorders
- Continued price increases, supply chain issues, comments regarding freight costs. Supply chain issues expected to continue for “awhile”.
- Some comments about price increases not being realized due to competitive marketplace pressures
- Strong quotation activity
- Component shortages. Those who manufacture in Mexico are having a supply chain, and possibly cost, advantage
- The field adjustable fixtures seem to be gaining share in the market. Some controls adoption (but it’s a crowded market that, because of the array of “choice” creates confusion for distributors and contractors.)
Reps / Agents
- Agents report strong growth, comparable to distributors when margin is taken into account.
- Slowdown in Q2, but still “strong”
- Inventory / supply chain issues along with price increase issues
- Remodeling / renovation work and some light commercial. Few large projects except warehouses.
This issue also includes:
- Q2 lighting forecast by each audience.
- Feedback, by audience, on what sales / marketing strategies are most effective for new lighting product introductions. (Spoiler alert … the ranking of the activities is pretty similar, but some audiences see some tactics more effective than others.)
Survey respondents received a complimentary copy of the report. The report is available for $29 by clicking here. Please allow 24 hours to have the report sent to you (as I’m on-site at a client the beginning of this week.)