W.W. Grainger Inc.’s Q1 2025 results underscore a widening gap between the company’s fast-growing ecommerce operations and its traditional industrial distribution business divide that’s reshaping how the $51 billion supplier plans to drive future growth.
The centerpiece of that shift is Grainger’s Endless Assortment segment, which includes online-first platforms Zoro (U.S.) and MonotaRO (Japan). In Q1, Endless Assortment revenue rose 10.3% year over year to $1.26 billion.
And adjusted for currency and fewer selling days, daily sales surged 15.3%, compared to just 1.7% overall growth for the company. Now, that segment accounts for 30% of Grainger’s total quarterly revenue, up from 27% a year ago.
“Endless Assortment is powering our growth,” CEO D.G. Macpherson said during Grainger’s Q1 earnings call. “Zoro and MonotaRO continue to expand reach and drive profitable customer acquisition with a combined catalog of over 38 million SKUs.”
Grainger grows ecommerce business
Zoro’s daily sales climbed 18.4%, while MonotaRO grew 13.6%.
That performance stands in stark contrast to Grainger’s High-Touch Solutions segment, which reported a 0.2% decline in reported revenue and sluggish demand across manufacturing and government sectors. After adjusting for selling days and currency, volume growth in High-Touch was just 1.9%. Chief financial officer Deidra Merriwether attributed the weakness to weather, holiday timing, and softness in certain customer verticals.
Analysts say the results validate Grainger’s long-term bet on scalable, digitally native commerce.
“Endless Assortment is clearly Grainger’s growth engine,” said Dave Manthey, senior analyst at Baird. “It gives the company exposure to a more transactional customer base and international markets that aren’t as reliant on traditional field sales.”
That’s become a critical hedge for Grainger as macroeconomic and policy uncertainty — including mounting tariffs on Chinese goods — threaten industrial demand. While executives said the current tariff exposure is limited, Grainger has begun passing through modest price increases on a small subset of directly imported goods. And it expects to make further adjustments in future quarters.
“The environment is fluid, and we’ll adapt as supplier costs materialize,” Merriwether said. “So far, we’re seeing only a 1% to 1.5% net pricing impact, but that could evolve if tariffs persist.”
How Grainger invests in digital transformation
Grainger’s digital investments — including its proprietary pricing engine, product information system, and global sourcing infrastructure — give it the flexibility to manage through volatility. But the durability of Endless Assortment’s margin expansion and customer retention will be critical if North American demand continues to sputter.
Brian Bernard, equity analyst at Morningstar, said the results reinforce Grainger’s strategy.
“Endless Assortment delivers high-growth, high-margin ecommerce at scale,” he said. “That’s going to be essential if traditional MRO [maintenance, repair and operations] spending in the U.S. remains flat.”
Grainger maintained its full-year 2025 guidance, including projected revenue of $17.6 billion to $18.1 billion. But the messaging from executives was clear: Ecommerce is no longer a side business — it’s the foundation of Grainger’s future.
“Digital is no longer an add-on,” Macpherson said. “It’s a core differentiator. We’re scaling these platforms to serve customers who expect speed, value, and choice.”
With ecommerce driving performance, the company expects second-quarter revenue to exceed $4.5 billion. April daily sales were up 5.5%, with strength continuing in Endless Assortment.
Whether that’s enough to fully offset slowing industrial markets remains to be seen. But one thing is clear: Grainger’s growth story increasingly begins — and ends — online.
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