Grainger’s business model—in which store locations and field sales representatives are integral—may go out of date as the internet allows MRO customers to do more comparison shopping, increasing the pressure on distributors to cut prices.
Despite small forays into global markets, Grainger’s sales still depend primarily sales to U.S. industry, which is threatened by high costs and advances in the transportation and logistics business that make off-shoring ever more attractive. Grainger may not be able to shift its operations abroad as quickly as its customers do.