Inside PPAI: Members Report Sales Expectations Mixed On Second Half Of 2020
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PPAI’s Industry Sales Review surveyed industry suppliers and distributors this summer to measure the impact of the COVID-19 pandemic on the first two quarters of 2020 and how their businesses responded.
As expected, those surveyed reported that sales declined over the first six months of the year, registering at 45 percent for suppliers and 49 percent for distributors in the first quarter before dipping to 78 percent for both suppliers and distributors in the second quarter. Looking ahead to the second half of 2020, expectations are mixed. Among suppliers, 43 percent expect profits to increase or stay the same while 39 percent expect them to decrease. Distributors are also split, with 37 percent expecting profits to increase or stay the same over the next six months and 44 percent expecting a decrease.
Personal protective equipment (PPE) has become a big part of both suppliers’ and distributors’ businesses. The survey found that among suppliers, 24 percent say it accounts for 30 percent or more of their business; a statement echoed by more than half (57 percent) of distributors.
Most respondents in the survey (60 percent) reported being able to retain their staff during the pandemic, although 16 percent of respondents said they reduced hours and nine percent said that while they hadn’t laid anyone off yet, they will most likely have to. Distributors are a little better off, with 64 percent saying they had not let any of their staff go compared to 42 percent of suppliers. More than half of survey respondents (54 percent) say that their staff numbers will remain the same in the second half of 2020.
The survey asked respondents how confident they feel about their businesses’ viability over the next six to 12 months. The largest share, 31 percent, described themselves as “fairly worried.” Among distributors, 33 percent said the same, compared to 24 percent of suppliers. Overall, 29 percent responded that they are neither confident or worried, 22 percent are very confident, 11 percent are extremely confident and seven percent are extremely worried.
Looking to positive outcomes of the COVID-19 pandemic, 47.4 percent cited the better use of technology like Zoom for video conferencing. Also, 38.4 percent noted time spent improving their company’s brand and marketing image, 36.8 percent said more efficient use of resources and improving internal systems, and 32.8 percent listed more efficient staffing and flexible work arrangements for staff.
The survey also found that among respondents with employees working from home, almost two-thirds (63 percent) are considering allowing them to continue on a semi-permanent basis.
Full results of the Industry Sales Review, including breakdowns of the results for distributors and suppliers, are available to PPAI members at my.ppai.org/benefits/research.
James Khattak is news editor of PPB.