Discounters Chase US Sales

The big American discount stores are encrocaching onto traditional hardware territory. Bob Vereen investigates…

Whenever they are in the market for hardware, paint, garden products or almost any hardlines product, American consumers can take their pick from a multitude of places to buy—lots of home centre stores, independent or chain-owned, and thousands of independent hardware stores. The range of venues to purchase from also includes more than 6,000 huge discount stores and supercentres—the American equivalent of Europe’s hypermarket.

Hardware in Meijer.jpg Caption: Meijer carries a wide assortment of general hardware

These stores, which stress one-stop shopping convenience as a mainstay of their sales appeal, are one of the reasons so many small independent hardware, lumber/building material and home centres have gone out of business. They enjoy high foot traffic compared with the typical hardware store and feature some of these products in almost every one of their weekly advertising circulars.

Home centre giants such as Home Depot, Lowes and Menards, as well as many hardware people, pooh-pooh these discount competitors, yet they are certainly taking some sales away from traditional outlets.

Kmart’s range of basic hardware is designed to meet the needs of DIYers

The most aggressive of them all—no surprise—is Wal*Mart, the world’s biggest retailing operation. Wal*Mart allocates approximately 8,500 sq. ft. of space to its assortment of hardware, paint, plumbing equipment, electrical goods, and tools. In addition, they provide large, seasonal allocations of space to lawn and garden, patio and outdoor living products. Throw adjoining automotive car care products into the mix, and it all adds up to the equivalent of a good sized small home centre or large hardware store. Meijer, an independent supercentre with nearly 180 midwestern stores, even outdoes Wal*Mart’s space allocation, whereas Kmart and Target, the other two major discount chains, devote less space to these categories. Target, whose appeal is more fashion-oriented and aimed primarily at women, devotes only about 3,500 sq. ft. to basic goods, but is a powerful player in outdoor living and gardening in season.

Just how much competition are these stores to other retailers?
Wal*Mart has about 3,000 stores in the United States, including discount stores and supercentres. Kmart has about 2,000 and Target, 1,000. Plus Meijer’s 180…and then add in the other smaller discount chains such as ShopKo, Pamida, etc. Wal*Mart’s 3,000 stores are equivalent to the number of Ace’s or Do It Best’s hardware stores. Together Wal*Mart and Kmart have about as many units as TruServ’s 5,000-plus smaller hardware and lumberyard retailers. Most home centre and hardware executives gleefully point out the lack of customer service in mass merchandisers, and it is especially true of the hardlines departments of these chains—except for Wal*Mart, which continuously staffs the department. In the other chains, consumers can wander around for minutes—maybe hours—without seeing an employee, so one must rely on self-service and self-selection about 100% of the time. One can’t help but wonder about the shoplifting that must occur in these departments, with no sales assistants anywhere in sight and some high cost, pilferable, items easily available.

A broad range of electrical goods is just one of an extensive range of hardware lines that the retailing giant stocks

Admittedly, even Wal*Mart’s staffing efforts don’t equate with the kinds of help and service a consumer would receive in a smaller, dedicated hardlines store, but the help is there and generally better than what might be expected. It is especially strange to see in Meijer and Kmart, colour-matching programs and equipment with nobody anywhere near to provide service. Not so at Wal*Mart, where paint is a big-seller because of a staffed, up-front colour centre, manned not by some youngster, but by a senior citizen who can talk the language, provide personal assurance and instill confidence.

Target, in its limited allocation of space, no longer even stocks paint, though it once did. It recognized almost a decade ago, that these categories required experienced sales help, which it wasn’t providing, so it sharply cut back on its assortments.

Wal*Mart has a good choice of power tools and the sales staff to match

Wal*Mart and Meijer carry the broadest assortments in hand and power tools, locksets, basic hardware, as well as plumbing and electrical goods. Kmart’s assortments are smaller, but still designed to meet the needs of most DIYers, especially for little fix-up tasks. Meijer outdoes Wal*Mart in its electrical selection, and includes a decent assortment of lighting fixtures and ceiling fans.

Except in hand tools, the chains focus on nationally known brands. In hand tools, Stanley is the dominant vendor, supported by each store’s China-sourced private brand. In power tools, Black & Decker is the dominant brand. Paint lines vary, with Dutch Boy strong in several chains. Kmart offers the Martha Stewart line in colour-matching, however, with an unmanned paint department how strong could sales be??

With its high traffic, consistently-staffed departments and good range of basic assortments, it seems clear that Wal*Mart is the most successful hardlines mass merchant.

Bob Vereen, Hardware Journal’s US correspondent