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Home Depot and Lowe’s, the two largest DIY mul-tiples in the world, are engaged in a fierce battle for the hearts and minds of consumers as well as those of Wall Street analysts
Right now, Lowe’s is the Wall Street darling, a post long held by Home Depot, but Depot continues as the largest firm by a considerable margin. Whereas Home Depot operated 1 431 stores in the US in 2002, Lowe’s total came to 854. In terms of sales, Home Depot is even further ahead and achieved a slight increase in market share last year.
There is no question, however, that Lowe’s had the higher rates of growth over the past two years. Bob Nardelli, Home Depot’s new CEO and an ex-General Electric executive, changed so many things so fast at Home Depot that morale faded, along with its vaunted customer service. Long-time employees left, many of them rich because of stock ownership, and remaining employees began fearing for their jobs as entrepreneurship degenerated into slow-moving bureaucracy.
The strategies of the two companies today differ greatly. With far fewer stores in many major metropolitan areas than Home Depot and a softer warehouse look, Lowe’s feels it has room to add hundreds of outlets without any changes.
Home Depot, on the other hand, has nearly saturated most of the main metropolitan markets and must find its growth either by going into smaller cities (where Lowe’s has long been a major factor) or come up with store formats which will target different consumer and business segments.
In total sales, Home Depot achieved $ 58.247 bn last year, an increase of 8.8 per cent, far below its long-time average. Lowe’s, on the other hand, racked up $ 26.491 bn in sales, an increase of 19.8 per cent. Lowe’s net earnings increased 43.8 per cent, far overshadowing those of Home Depot at 20.4 per cent.
According to data in its annual report, Home Depot’s sales per store have been flat for the past two years. One reason for this is the opening of new stores close to existing ones, thereby cannibalising sales and, in some cases, relieving such high sales volumes that stores were too crowded. One store is reported to have achieved sales of $ 106 mio in one year.
As of fiscal 2002 the number one in the USA operated 1 370 Home Depot stores, 52 Expo Design Centers, five Home Depot Supply stores, three Home Depot Landscape Supply units and one Home Depot Floor Store in the US, plus 89 Home Depots in Canada and 12 in Mexico.
In addition, the company operates Apex Supply Co., Georgia Lighting, Maintenance Warehouse, Your “other” Warehouse, Designplace Direct and three flooring companies operating under HD Builder Solutions Group. These additional units and divisions make it very difficult to judge if Depot is actually suffering real sales declines in its Home Depot stores.
There is no question, however, that Lowe’s had the higher rates of growth over the past two years. Bob Nardelli, Home Depot’s new CEO and an ex-General Electric executive, changed so many things so fast at Home Depot that morale faded, along with its vaunted customer service. Long-time employees left, many of them rich because of stock ownership, and remaining employees began fearing for their jobs as entrepreneurship degenerated into slow-moving bureaucracy.
The strategies of the two companies today differ greatly. With far fewer stores in many major metropolitan areas than Home Depot and a softer warehouse look, Lowe’s feels it has room to add hundreds of outlets without any changes.
Home Depot, on the other hand, has nearly saturated most of the main metropolitan markets and must find its growth either by going into smaller cities (where Lowe’s has long been a major factor) or come up with store formats which will target different consumer and business segments.
In total sales, Home Depot achieved $ 58.247 bn last year, an increase of 8.8 per cent, far below its long-time average. Lowe’s, on the other hand, racked up $ 26.491 bn in sales, an increase of 19.8 per cent. Lowe’s net earnings increased 43.8 per cent, far overshadowing those of Home Depot at 20.4 per cent.
According to data in its annual report, Home Depot’s sales per store have been flat for the past two years. One reason for this is the opening of new stores close to existing ones, thereby cannibalising sales and, in some cases, relieving such high sales volumes that stores were too crowded. One store is reported to have achieved sales of $ 106 mio in one year.
As of fiscal 2002 the number one in the USA operated 1 370 Home Depot stores, 52 Expo Design Centers, five Home Depot Supply stores, three Home Depot Landscape Supply units and one Home Depot Floor Store in the US, plus 89 Home Depots in Canada and 12 in Mexico.
In addition, the company operates Apex Supply Co., Georgia Lighting, Maintenance Warehouse, Your “other” Warehouse, Designplace Direct and three flooring companies operating under HD Builder Solutions Group. These additional units and divisions make it very difficult to judge if Depot is actually suffering real sales declines in its Home Depot stores.
