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Revenues continue to hit highs in distribution

The first few weeks of 2021 have started strongly for distributors across western Europe

Distribution has started the year strongly with revenues continuing to break records across western Europe.

Figures from Context, which gets sales data directly from distributors, has already shown that last year was solid and that 2021 has so far kept that momentum going.

The analyst house charts the progress of the western European channel on a weekly basis. For week three, the numbers showed distribution bringing in revenues of €1.8bn for the second week in a row.

Last week, Context forecast that the channel would enjoy year-on-year growth of between 6% and 12% this quarter. The firm has charted some concerns about shortages, but overall the sense of optimism across the distribution channel has continued to be high as the first few weeks of 2021 have progressed.

Most countries across Europe are showing revenue improvements on 2020, but the UK has been a bit more sluggish, although only marginally behind the position it was in back in the first few weeks of 2019. The government’s move to get more laptops into the hands of schools has driven down prices, which has had a hit on revenues, given that is the most in-demand technology at the moment.

When it came to product areas, the categories that have shone the brightest through the coronavirus pandemic were again in high demand in the first few weeks of January, with mobile computing and accessories at the top of user wish lists.

Drilling down into the mobile category, the top form factor was tablets, with year-on-year growth of more than 80%. Notebooks were up by 70% and monitors were at the same level increase, as more people reached out for technology to support home working and learning.

Other segments in which the channel should have noticed demand remaining high include software, audio-visual systems, warranties and telecoms.

“Europe’s distributors continue to get the year off to a flying start, with the kind of revenue figures we’d expect in weeks seven or eight rather than at this point in Q1,” said Adam Simon, global managing director at Context.

“Home working categories like notebooks and tablets are driving unprecedented growth this early in a new year, but we’re also seeing the impact of supply shortages pushing average purchase prices up in some categories,” he said.

Context recently released figures covering the performance of distribution over the fourth quarter of 2020, with European distribution sales hitting a record €26.3bn, with year-on-year growth of 10.2%.

“We knew that growth was more likely to go up than down in Q4, but we never anticipated such an impressive fourth quarter,” said Simon. “Our predictions were consistently beaten by the channel in 2020.”

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