During the past few years, Fastenal Co., Winona, Minn., has opened up new branches at an insanely fast rate. While the company plans to hold back at branch openings, it has already opened 15 locations this year and now has 2,326 branches in the United States. The company opened 161 new stores in 2008 and 161 in 2007.
As reported in a May 2008 Electrical Wholesaling article, the company has opened up more than 1,300 branch locations in the past 10 years and sees the potential for 3,500 stores in North America. The sheer number of Fastenal branch locations is all the more impressive when you realize that the five largest full-line electrical distributors – Rexel, WESCO, Graybar, Consolidated Electrical Distributors and Sonepar – operate a combined total of approximately 1,400 branches. In addition to its 2,300-plus traditional branches, Fastenal operates almost 900 “in-plant sites” where it sells products to customers either in their own locations or from nearby facilities.
Fastenal is currently altering the growth drivers of its business and will devote more of its energies to growing sales by adding outside sales personnel to existing facilities than on adding so many branches. The company’s recently published 10-K offered some interesting insight into the cost of running this huge branch network. During each quarter of 2008, total vehicle fuel costs averaged approximately $2.9 million, $3.7 million, $3.7 million, and $2.4 million per month, respectively.