2012 Industry Scoreboard
Against the backdrop of a slowly recovering economy, Home Channel News has once again published its Top 300 Industry Scoreboard — the 300 leading home improvement and building material retailers ranked by sales for the most recent fiscal year. For the second consecutive year, the sales of the Top 300 retailers showed a positive increase over the previous year.
Calendar year 2011 was the year of the lowest single-family housing starts ever recorded. But it was also the year of a slow-moving economic recovery. The nation’s housing stock got another year older. And as economists from the National Association of Home Builders (NAHB) like to point out, 20-year-olds got another year closer to finally moving out of their parents’ basement.
The macroeconomic and social factors that influenced sales at the nation’s largest and most successful home improvement and building material retailers are too numerous to identify and too complicated to measure. More important are the local market conditions — the job creation, the family formation and the spending habits of local communities.
A few highlights from the list this year:
For the second year in a row, the companies listed in the Top 300 showed a combined increase in sales. Combined sales were $205.9 billion, up 3.3%.
Most of that growth took place at the top of the list. The sum of the increase in sales at Home Depot and Lowe’s in 2011 was $3.783 billion. If that sales growth were ranked as a company, it would rank eighth among all home improvement retailers.
Walmart is back
After a short-lived experiment in 2011 to remove the Bentonville, Ark., giant from the list, the editors have reversed course. The influence of Walmart Stores on home improvement is too large to ignore, especially as the company builds on its DIY basics.
Welcome to Amazon.com
Amazon continues to reshape the way consumers — and retail executives — think about shopping. Increasingly that thought process is affecting home improvement. The estimated $1.5 billion in home improvement sales equates to about 3% of the company’s total sales.
Gainers vs. decliners
After a difficult 2009 that was dominated by decliners, more companies are reporting sales increases — 57% on the current Scoreboard.
More good news: Among those companies in the green in 2011, a full 42% showed double-digit sales growth.
Highlights of a Golden Panel
It started out as an exercise in benchmarking of an economic recovery, turned to an examination of best practices for independent retailers and concluded with a celebration of family-retailing values.
It was the second-annual Golden Hammer Retailer Award Panel held during the National Hardware Show in Las Vegas last month. Officially titled, “The Recovery: Is it real, and what to do about it?” the discussion also flowed from specific business tips to general economic outlooks.
Delivering the goods were honorees of the 28th Golden Hammer Awards: Hall of Fame inductee Bob Taylor, CEO of Do it Best Corp.; M. Marcus Moran Jr., CEO of Aubuchon Hardware, Retailer of the Year; and Brad McDaniel, owner of McDaniel’s Do-It Center, Tools of the Trade honoree.
Here were some of the highlights extracted from the presentation:
On the economy
Bob Taylor: “We are moving in a more positive direction. That said, expecting anything more than the 700,000 to 750,000 housing starts range will be a stretch.
“But it is moving in a positive direction. The folks who have managed their business well during the downturn have positioned themselves well now for the road ahead.”
M. Marcus Moran Jr.: “There are deals out there in real estate for purchasing a hardware store. And in a difficult period, with an aging owner who probably has no succession plan and probably with college-educated children who are going to work elsewhere. Their exit plan is limited. And what we do is we provide a package that normally pleases them.”
Brad McDaniel: “For most of the 2000s, advertising was really easy. It seemed whatever circular we bought from Do it Best, we would mail it out and it brought people in. If we threw something at the newspaper, that would bring them in, too. It’s been tougher, though, in the last couple years. So one thing we’re working on in our market is getting together with other Do it Best members and trying to do some group advertising.”
Taylor: “On the fuel price side, any time fuel gets above $4 per gallon or in the range, it impacts distribution costs. And it also affects people psychologically every week at the pump, when they see the impact the price has. Another cautionary piece and even more troubling, is the uncertainty. A lot of it does fall on Washington, D.C., and either the activity or lack thereof, depending on your perspective. Just what’s coming next in terms of tax policy, regulation might have a muting effect on the recovery.”
On competing with big boxes
McDaniel: “When we found out the box stores were coming, one of the things that really helped us compete successfully was the brand names. One was Benjamin Moore, because people know that name, and the magazines show that name.”
Marcus: “[Benjamin Moore] has been a great partner — about two full years of diligent work on their part and our part. Now not only do we have a strong paint department, but we are able to focus on color and color advice. We’re running seminars for our employees on color, and we’re going to accelerate it. It takes repetition, and it takes everyone in the store to get engaged with color.”
McDaniel: “The advantage that we independents have is that we learn people’s names. We know people’s families. Their dad shopped at the store, their grandfather shopped at the store. I have employees who have been with us a long time and know them — that also helps us in the fight.”
Marcus: “We had neighborhoods that have deteriorated. We have had big boxes that have put our lights out so to speak, or dimmed them, and it’s time to move on because that capital is no longer productive. Our source of funding acquisitions is just sometimes taking our mistakes or our misfortunes and picking up our marbles and finding somewhere else [to operate]. So, it’s a big chess game out there, and you have got to know where to put your investments.”
On the family business
Marcus: “Obviously, I think the business would not be as strong if we didn’t have good family members who have been in place a long time. The first generation and the second generation have passed on. In the third generation, each of us has a little more than 40 years experience. But more importantly, we have a strong, educated fourth generation.”
Taylor: “When you talk about family members coming into the business, that doesn’t happen unless they see growing up, an environment that worked for their parents. And one of the things that I’ve certainly enjoyed for 37 years is that this is a relationship industry. If it weren’t, I wouldn’t have enjoyed it half as much as I did.”
Marcus: “We’re tagged as a family business because of the family ownership. But again, there are some very important people in our management, and they are rather young, and one is in charge of all retail operations at age 30. I could go on with other stories. We’re a family business, but as a corporate family, we have blood members and non-blood members who together are all called family. And they are all holding key positions. So even though we are family-held, we are broadly managed.”
On the joys of hardware retailing
Taylor: “I think that’s great when the excitement continues. And we continue to attract great young people — and it’s especially nice when they’re family members — into this business.”
McDaniel: “When the sun comes out and everybody is in a good mood and stuff is flying off the shelves, retail is a lot of fun. A couple weeks ago on a Saturday — our first beautiful sunny Saturday in Seattle in a few months — it was just unreal. Cars were backed up at the parking lot, lines at the register. So I texted the wife and said, ‘Bring as many of the boys as you can.’ Three of [my sons] showed up, they grabbed the vest … even my 9 year old, he’s stacking fertilizer and grabbing shopping carts. That’s what makes it fun and to see them excited about the business too. And that’s also what makes me very optimistic.”
NHS 2012: Editor’s Picks
Between the North and South halls, New Product World and Inventors Spotlight, attendees at the 2012 National Hardware Show were once again presented with the fruits of innovation derived from hours of toil in garage workshops and corporate labs. It’s always hard to pick just a few favorites; the only way to see them all is to wander the aisles, shake your head, and say, “Why didn’t somebody think of that before?”
Chic on the cheap
Coach House Accents (Coachhouseaccents.com) looks like high-end garage doors — multi-paned windows, decorative handles and hinges — but really it’s just a façade that you put on your exiting garage door. It’s a great add-on sales opportunity for window and door installers.
All my girlfriends will want one
A great impulse purchase, Jeweler in the Dishwasher (Jewelerinthedishwasher.com) makes a plastic basket with special compartments that cleans rings, bracelets and necklaces in a regular dishwasher. It provides clear instructions on which precious stones are suitable and which aren’t.
Best toilet enhancement
There were an astonishing number of contenders this year. It’s hard to pass over the obvious appeal of the Miracle Seat, which uses slits and a fan to ventilate odors and remove germs (Miracleseat.com). But having replaced any number of broken fill valves, leaking flappers and other malfunctioning toilet parts over the years, my vote goes to the Toilet Guardian (Aquaone.com), which pinpoints problems and then shuts off the water to prevent overflows or running toilets.
Looks like it will work
Say goodbye to the caulking gun and the messy wet index finger with this “peel and stick” trim that can be used in bathrooms and kitchens. Corner Flex (Cornerflex.com) can also bend around corners.
The paint sundries category is, hands down, my top pick for innovation year after year. Cleaning and reusing paint rollers is one of the biggest challenges, and the NHS 2012 offerings brought out many great inventions: the Roller Keeper by Obvious Solutions (Rollerkeeper.com), an airtight container that removes and stores wet paint rollers, was one of my favorites.
Dog’s worst friend
StayDri Pet Wash Shower System looks like a large incubator made of PVC pipes and clear plastic sheeting. There are portals to insert your arms. It’s portable and collapsible, an important feature for dogs who tend to bolt at bath time. (Creative Technology Industries / Ctecglobal.com)
The best Christmas tree stand ever
Every year, without fail, inventors come to the show with a better contraption to hold up your Christmas tree. I counted three this year, but the Omega Tree Stand (Omegatreestand.com) had two big pluses: It uses clamps instead of screws and disassembles for storage. The company advertises it as “the marriage saver.”
Organize my life, please!
This is an explosive category that has moved way beyond plastic bins. Computer, TV and stereo cords are obviously driving people crazy, judging from the sheer number of new organizing tools. I liked the line of products from Toolio (Toolio.com) and the flexible cord channel from UT Wire (UT-Wire.com).
A better mousetrap
This is another perennial showing in the New Products World. I’m passing over the device that drowns mice in oil. No special pick this year.
Best heavy metal product
Officially licensed KISS garden gnomes for your rock garden. I never much liked the band, but I love the gnomes. (www.Grillacovers.com)
Must have in every kitchen
I’ve seen electronic fly swatters for sale on the Internet, and friends have brought them back from Asia, but why don’t I see them in retail outlets? I came across two vendors, but my favorite was DynaZap (Dynatrap.com). It has a flexible head and can extend out to 3 ft.
Best source of illumination
Lots to choose from here, with all the offerings in solar and LED lighting. I really liked the Coast LED flashlight because of its telescoping ability. You can control the size of the beam by pulling or pushing on the flashlight’s handle.