Home Depot continues to experiment

At four locations in the area around Nashville, Tennessee, the company has opened Home Depot Fuel service stations with “convenience” stores selling a limited selection of packaged snacks like hot dogs, sausages and sandwiches on their car parks.
Substantial business is done with convenience stores in the United States. These stock a thousand or more items ranging from newspapers and magazines to coffee and soft drinks, as well as health and beauty aid sundries.
By contrast, Home Depot’s test stores are much more limited in their range: snacks, some food items and hot and cold drinks that consumers and tradesmen, the regular clientele of the big boxes with their bright orange logos, can either eat on the spot or take with them on the job.
The Home Depot Fuel stores are smaller, cleaner and easier to shop in than conventional American convenience outlets. They are also different from the other service stations on supermarket car parks, as well as those operated by Wal-Mart. These service stations are just that: a building around 2 m² in size where customers can pick up cigarettes and a few sweets when paying for their petrol.
Home Depot’s test stores are attractively designed both inside and out, with broad aisles and clear structures. The checkout is located at the back of the store, which encourages impulse buying of sweets and snacks. The customer routing and low fixtures offer good protection against shoplifting because staff can keep the entire sales floor under surveillance.
The shops feature the very latest in coffee, cappuccino and cold drink dispensing machines, so that the refreshments seem closer to Starbucks in quality than just a basic cup of coffee.
These Home Depot Fuel store are also different in terms of décor: they feature large graphics that are attractive and emphasise the lack of clutter as well.
Petrol prices are a penny below those charged by the nearby competition, and customers with Home Depot credit cards can save another three cents a gallon (3.8 l).
These service station shops are just one more example of the diversification efforts being made by Bob Nardelli. When he took over five years ago, he quickly realised that Home Depot is nearing saturation in its conventional DIY store format. Which means that every new opening simply leads to the cannibalisation of sales in existing stores, and there are few areas still untouched by Home Depot.
If Home Depot can succeed in generating a reasonable sales volume in these new convenience stores…