Channel stocks hammered by homework demands

The channel is racing to find stock due to a sudden spike in home working products.

While these sales levels look good on the balance sheet they are not so good for channel inventory levels.

Context, which gets its numbers directly from distributors across Western Europe, has set up a Covid-19 weekly report tracking the performance of some key product lines.

The latest figures, for the four weeks ending 22 March, showed that webcams saw a year-on-year increase in revenues of 127 percent, with headsets and microphones up by 76 per cent. Notebooks have also continued to sell well, with the performance in the first three weeks of March producing year-on-year growth of 56 percent for commercial products.

Spending was not just confined to hardware and some software categories also saw impressive growth: database management (60 per cent), virtualisation (55 percent), developer tools (47 percent) and security software (40 percent).

However Context’s global managing director  Adam Simon said that many distributors are finding that their supply is critically low in quite a few of the top markets.

“They’ve told us that their customers are buying everything they can, including ageing stock. Low stock is being driven by disruption in supply resulting from earlier manufacturing issues in China and logistics problems. There’s limited container space for products shipping from China and increased border controls in Europe have contributed to lengthening product journeys”, he said.

Context has found that overall, week 12 figures show sales revenue growth in Europe eight percent higher than it was the same time last year, coming in at 10 percent compared to two per cent in 2019.

The experience of Italy has shown though that the demand peaks and then drops away in just a matter of weeks and Context is expecting that to happen in other Western countries that went into lockdown later.