The annual RER 100 might be the single best barometer of the equipment rental industry. I know it is for me. This year's RER 100, which starts on page 46, is my eighth since I joined RER. Revisiting the first one, back in 1993, I was amazed how much has changed in eight years.
The first thing that jumps out at me is the disappearance of so many familiar names. Only 13 of the top 50 companies on the 1993 list remain on this year's. Do you remember American Hi-Lift? Elmen Rent All? Clementina? Big 4? They were all in the top 10 that year. Yes, California-based Big 4 Rents, with all of nine locations and $25.2 million in revenue, rounded out the top 10 “giants” of the rental industry.
This year, No. 10 generated 15 times that in rental revenue and one-half billion in total revenue. Clearly, the definition of giant in this industry has changed.
Taking it a step further, the current 100 largest rental companies generated more than $8.6 billion in rental revenue last year. Eight years ago, the top 100 accounted for less than $1.5 billion, or about one-sixth the amount of this year's list. The top 10 companies alone accounted for almost $6.5 billion in rental revenue, led by United Rentals, which became the first company in industry history to surpass the $2 billion mark.
That's the impact of consolidation. Ironically, this year's list also serves as proof that the consolidation story stopped being written last year. Take a look at the growth of revenue versus the growth of locations.
The combined revenue growth of the top 10 companies continued to soar in 2000, increasing a collective 30 percent. Location growth slowed considerably, however, rising 8 percent to a combined 2,409 outlets operated by the top 10 companies. For comparison, in three previous years with consolidation activity at its peak, the locations among the top companies increased 67 percent (1997), 66 percent (1998) and 32 percent (1999).
The slowdown reflects the ongoing shift among the major rental companies from acquisition-based expansion to organic — or same-store — growth. That's not a bad shift, though it's also not a painless one as the recent layoffs in the name of efficiency attest. As the industry tightens its collective belt in uncertain economic times, perhaps the definition of rental giant will change again.