Most of these firms believe that GWW’s rate of sales growth and incremental margins is quite below other industrial distributors, compelling investors to move to them. The firms suggest that the Company may increase its margins by implementing a new commission and bonus structure, with profitability as the focal point, instead of volumes. Moreover, the firms also apprehend that the demand for MRO might fall as other providers may compete for the large government contracts, intensifying the competition. However, the firms believe that though the near-term sales seem to be under pressure and are not expected to improve until March-April, the long-term outlook for Grainger remains favorable based on continued share gains and productivity-driven margin improvement.
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