Home Centers & Hardware Stores

Home Centers & Hardware Stores

Brief Excerpt from Industry Overview Chapter:

Companies in this industry sell building supplies, lumber, hardware, tools, and other home repair and improvement products. Major companies include Home Depot, Lowe's, Menards, and True Value (all based in the US), as well as Kingfisher (UK), Leroy Merlin (France), OBI (Germany), and RONA (Canada).

COMPETITIVE LANDSCAPE

Home remodeling and repair and new homebuilding drive demand. The profitability of individual companies depends on low-cost purchasing, effective merchandising, and competitive pricing. Large companies can offer wide selections, supply high-volume goods to builders, and have advantages in purchasing, finance, distribution, and marketing. Small companies can compete by offering specialty products, providing superior service, or serving a local market. The home center segment of the industry is highly concentrated: the top two companies dominate. The hardware stores segment of the industry is fragmented: the 50 largest firms account for about 40% of industry revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products for US home centers and hardware stores include hardware, nonpower hand tools, and other building materials and supplies (about 35% of revenue); plumbing, electrical, and HVAC supplies (about 15%); and home lawn and garden goods (about 10%). Building supplies include doors, windows, masonry supplies, cabinets, and countertops. Lawn and garden supplies include lawn care machinery; outdoor nursery stock (trees and shrubs); and fertilizers. Home centers often carry a full line of appliances. Companies may also offer installation, delivery, design, or tool rental services.