EUEW Climate Report shows overall contentment with single limitations regarding margin pressures

Article by Jonas Groten, the IFH Institute

The market of electrical Wholesalers is characterized by structural changes. With regard for a better assessment and alignment to the current situation and the challenges of the future IFH Köln carried out a survey on behalf of the EUEW. With this project, we are trying to paint a picture of the business climate in the electrical wholesale industry. Even though in this first attempt the number of participants is limited, we want to share the first results of this project. The results show: Electrical wholesale companies in the EUEW are all in all satisfied. The index value regarding the current industry climate reaches 118 points and is therefore slightly positive. The outlook on the other hand shows uncertainty. While most of the participating companies expect a at least stable business climate for the next 12 months, 22 percent count on a at least slight change for the worse. On company level the overall climate as well is rated rather good. The development of the company profit and the development of product margins is what the participants of the survey are most concerned about. Almost four out of five companies are claiming margin pressures as one of the current biggest challenges. Followed by the rise of competitors and finding and retaining employees.

Electrical Wholesalers see digitization more as a chance than a threat

While most companies see digitization more as an opportunity than a threat, there are still challenges regarding digital developments. And still every third company is at least partly threatened by digital developments. Especially higher investments in technology are challenging. 61 percent of the survey’s participants assess software investments critical. Rising price transparency and severe competition through platforms are expected to have negative impact as well. But what inhibits companies on their way into the digital era? The good news is: More than a third of the survey’s participants don’t see any obstacles in their way. 31 percent on the other hand struggle with internal processes that are not yet in place and every fifth company is inhibited by outdated technical systems.

Further benefits

With the EUEW Climate report out now the EUEW learns where companies may need guidance and information to be able to operate successfully in future. The results are illustrating and proving the benefits of undertaking initiatives like this jointly, and we would wish that possibly all member organizations would take part in these newest endeavors in the future. In addition to the overall results we will be able to share specific country-reports that will be beneficial for every national EUEW member association.

IFH Köln – Who we are

IFH Köln offers analyses and strategic advice for retailers, wholesalers and the supplying industry – always relying on our profound data and sector knowledge. IFH Köln provides individual solutions or proven-and-tested sector-specific know-how. Our databases and tailor-made projects support clients in preparing and justifying management decisions.