What’s Going on in the American DIY Market?
Home centre sales, including those of the world’s two largest retailers – Home Depot and Lowe’s – represented more than half of the DIY total of $178.4 billion. Those same sales were projected to have dropped to $167.3 billion in 2009 by the retail association.
Timber/building material dealer sales reached $77.6 billion in 2008 and were projected to have dropped to $65.3 billion in 2009. Hardware stores, while far more numerous than either home centres or timber/building material outlets, accounted for only $37.5 billion in sales in 2008, but were not suffering as much during 2009 and were projected to have sales of $36 billion in 2009.
America’s 350-odd million citizens have a choice of nearly 40,000 primary DIY retailers from which to make their purchases, plus thousands of other retail outlets that dabble in the kinds of products stocked by the primary DIY retail outlets, including mass merchants, drug store and supermarket chains and farm/fleet stores. The home centre segment is dominated by the two large chains, Home Depot and Lowe’s. Together, they accounted for $119.5 billion in retail sales. Add in an estimated $8 billion for the privately-owned Menards and the rest of the nation’s home centres collected less than $51 billion in 2008. Those top three chains operate far larger stores than the hundreds of other home centre retailers. Both Home Depot and Lowe’s stores average more than 100,000 square feet in size and some Menard stores are now more than 200,000 square feet. In fact, the top 10 retailers in the total DIY industry, though operating only 13.7% of the stores, racked up 48.5% of total sales.
Throughout the industry, retailers of all types agree that the latter half of 2010 will see an increasing demand for service and helpful information by consumers, and a desire for a wide selection, which poses problems for merchants trying to control inventory investment in the face of slowing or falling sales.
An increasing number of retailers are turning to installation services as a growth opportunity. With so many workers now unemployed, they recognise that the labour pool to staff installation services has never been better. This year will still not be an easy year for retailers anywhere, but it will be a better one for those merchants who recognise the consumer’s desire for better selection of products, and who can provide better information and service in the retail outlets he or she visits.