Supplier Sales Up 4.5% In Q1

Increase Marks 13th Consecutive Quarterly Jump In Sales

1st Q Supplier Sales ReportIndustry supplier sales rose 4.5% in the first quarter of 2013, reaching $2.5 billion overall, according to new data released today by ASI. The increase marks the thirteenth consecutive quarterly jump in sales. "I believe that there is money that has been in a holding pattern in various marketing budgets that is now coming off the sidelines into the promotional market," said Brandon Mackay, president of SnugZ USA (asi/88060).

About 43% of respondents reported an increase in Q1 revenues, while 29% reported a decrease – the smallest percentage of suppliers acknowledging lower sales in five quarters. Both large (more than $10 million in annual sales) and smaller suppliers reported year-over-year gains in sales, with the latter generating a greater average revenue increase (5.1%). That breaks a recent trend, as in most of the last eight quarters, larger suppliers posted higher percentage growth.

More than one-half (57%) of suppliers expect their sales this year will be higher than their revenues in 2012. Smaller suppliers, in particular, were more optimistic with their individual 2013 forecasts, with 59% anticipating strong sales. A year ago, 75% of larger suppliers believed they would realize greater sales in 2012. For 2013, 50% of larger supplier firms are forecasting sales gains. "I see substantial growth for our company and for the industry with sales increasing steadily as the year progresses," said David Miller, president of Chocolate Inn/Taylor & Grant (asi/44900). "Corporate America is flush with money."

So far in 2013, distributor sales are increasing at a faster clip than supplier sales. Last month, Counselor reported Q1 distributor revenues increased 5.7%, a total year-over-year gain of $214 million.