Grainger 3Q17

D. G. Macpherson – Chairman and Chief Executive Officer

Modest tailwinds

So, we’ve experienced modest tailwinds that continued to increase throughout the year, I’d say. So it’s little better it seems at the quarter. In terms of the large customers, both the spot buy and large non-contract customers, which effectively are all spot buy, showed some growth for the first time in a long time, and that helps. And our contract customers continue to grow similarly to what we’ve seen, continue to improve slightly. So that’s no real change there in terms of the path that we’ve been on.

Hurricane volume to midsize customers

So the way that works is we have a hurricane. Our branches we typically load the branches with hurricane type products and they skew more to midsize customers. So we see more midsize customer hurricane volume than we would see with large customers. We see a lot of it everywhere of course.

Seeing inflation but not in COGS

So, our COGS inflation this year is going to be very slightly negative. And so we are seeing inflation. Now, we are starting to see inflationary pressures a little bit more than we’ve seen in the last few years of course. But so far, we have that is not shown up in our COGS line.

Programs keeping a lid on inflation

Yes, we do. We think we’ll keep a lid on inflation. I think if we didn’t have that program, we would be seeing some inflation for sure. But that program helps us to offset that inflation.