UPDATE-Grainger sales decline deepens in July

Wed Aug 12, 2009 11:33am EDT

NEW YORK, Aug 12 (Reuters) - WW Grainger Inc (GWW.N), a supplier of building maintenance products, said on Wednesday its sales declined at a faster pace in July than in either May or June, citing weak demand across its markets.
July sales were down 14 percent from a year earlier, compared to the 13 percent sales decline Grainger reported in June and 10 percent in June.
Sales for August are trending about the same as July, the company said.
Sales of seasonal products were weak because of mild weather in much of the United States. Sales to governments fell by mid-single digits, reflecting states' budget crises, while sales to the retail and manufacturing sectors were down by double-digits, Grainger said on a monthly podcast posted on its website.
About a quarter of company sales are to the manufacturing sector -- a smaller exposure to the sector than rivals like MSC Industrial Direct Co Inc (MSM.N) and WESCO International Inc (WCC.N).
Analysts have noted a high degree of correlation between Grainger's monthly sales performance and data on U.S. non-farm payrolls and industrial production, but improvement in those metrics has not been reflected in Grainger's results.
Last week's jobs report showed a much smaller than expected decline in U.S. payrolls, while this Friday's industrial production data are expected to show an increase.
The company also competes with industrial distributors Fastenal Co (FAST.O) and Applied Industrial Technologies Inc (AIT.N).
Grainger shares were down 47 cents to $88.25 in late morning trading on the New York Stock Exchange. Fastenal and Applied Industrial were both higher. (Reporting by Nick Zieminski, editing by Gerald E. McCormick)