Promotional products industry: Sales trend in the Netherlands

Dutch distributors and suppliers of promotional items expect to lose more than half of their expected turnover this year due to the COVID-19 crisis. This is the result of preliminary figures from an interim survey conducted by the research agency One Question for PromZ Vak. This survey, which takes place annually in April, helps to determine how sales have developed in the first quarter.
Of course, there were many questions about the COVID-19 crisis this year. The questionnaire was sent on 1 April and numerous distributors and suppliers responded immediately. The catastrophic effects for the promotional products industry of the corona crisis can already be guessed on the basis of around 120 answers.

In March occurred the turning point

The most important result is that the revenue losses will be very large: On average, a revenue loss of more than 50 percent is expected for the whole year 2020 compared to the year before. This result is not surprising and has to be substantiated now. In fact, one in five companies is expecting a sales loss of more than 75 percent in 2020, although almost half of the distributors – based on their sales in the first two months of this year – found out that their customers have higher budgets available for 2020.

Crisis is manifesting

How does the Corona crisis manifest itself in the industry? More than 90 percent of distributors and suppliers are confronted with delayed orders. Two thirds report cancelled orders, more than half report of difficulties with generating new sales due to home-based work. More than a third cannot deliver current orders and almost a quarter mourn the lack of personal contact with costumers in terms of decision making, so the inflow of new orders is stagnating. The problems are caused by the loss of orders on the one hand and delivery problems on the other. A third problem appears when it comes to payment. Almost half of the distributors and suppliers notice payment problems at a number of their customers.

The crisis continues

For now, we are not yet free of the Corona problems: On April 1, one third of distributors and suppliers are expecting the problems to be solved by end of June, about 30% think it will be September. A full of 40% believe it will last even until December or beyond, before problems are solved. More than one in three of the distributors and suppliers believe in catching up the loss in sales that has now occurred, while 60% hope to be able to make up at least a small part of the loss this year.

It will therefore not be surprising that the sector will make a use of the various emergency measures announced by the government: More than half of them will apply for a deferral of payments to the tax and customs authorities and half will also make use of the scheme to preserve jobs. Nearly all smaller distributors will also make use of the support programs for KMU.

More widespread purchasing in the future

More than half of the respondents in this study plan to place more emphasis on promotional products manufactured in the Netherlands or other EU countries in the future. The suppliers also indicate that they want to distribute purchasing more among the various manufacturers. They don’t consider to keep larger stocks in the Netherlands to avoid such problems in future.

The final results of the study will be published soon. Distributors and suppliers who received an invitation to participate in the one-question survey on 1 April and have not yet responded are urged to do so. This will give an even better picture of the actual impact of the Corona crisis on the ups and downs of the industry.

Text from PromZ (02-4-2020)

Bild: iStock.com/peshkov