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Builder confidence declines in June

BY HBSDEALER Staff

(Jun. 15) Builder confidence in the market for newly built, single-family homes dropped five points in June to 17, according to the latest National Association of Home Builders (NAHB)/Wells Fargo House Market Index (HMI).

The June figure brings the index back to February levels before the beginning of the home buyer tax credit surge.

"The home buyer tax credit did its job in stoking spring sales, and we expected a temporary pullback in the builders’ outlook after the credit expired at the end of April," said NAHB chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "However, the reduction in consumer activity may have been more dramatic than some builders had anticipated, which resulted in their lower confidence levels."

NAHB chief economist David Crowe also expected some softening in the market. "In the coming months, an improving economy, rising employment, low mortgage rates and stabilizing home values should help the housing market move forward. But as today’s HMI data shows, builders still remain very cautious and are aware that several factors could impede the nascent housing recovery, including serious problems in obtaining financing for the production of housing, faulty appraisal practices and competition from short sales and foreclosed properties."

Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asked builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

The HMI indexes recorded declines in June. The component gauging current sales conditions fell five points to 17, while the component gauging sales expectations for the next six months declined four points to 23 (from a one-point downward revised index level of 27 in May), and the component gauging traffic of prospective buyers fell two points to 14.

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Got tools? Father’s Day season hits stores

BY HBSDEALER Staff

The National Retail Federation’s (NRF’s) 2010 Father’s Day Consumer Intentions and Actions Survey, conducted by BIGresearch, expects the average person will spend $94.32 on a Father’s Day gift this year, up from $90.89 last year.

Whether that money is spent in the tool-rich home channel depends on a lot of factors — including marketing effectiveness. But regardless, there is significant effort in the home channel to capture some of those Father’s Day dollars.

No surprise — the two biggest players expect a boost, and their marketing is taking advantage of the association between Father’s Day and tools.

Home Depot’s website exhorts viewers to “Give dad what he really wants for Father’s Day.” Ryobi brands are heavily promoted in the accompanying product roundup. The retailer’s website allows easy shopping by breaking down Father’s Day gifts, according to the personality of the recipient: sports enthusiast, DIYer, garden enthusiast or outdoor entertainer.

At the Lowe’s website a similar push is underway. Father’s Day gift giving on the Lowe’s site, however, is organized by price — under $10, under $20, under $50, under $100 and over $100.

Despite the natural connection between tools and dads, home centers have their work cut out for them to take share from other retail channels, according to NRF’s data. When it comes to where people will purchase their gifts, discount stores (34.4%) and department stores (34.1%) will see the most traffic. Specialty stores such as greeting card or gift stores (26.4%), and online retailers (20.5%) are also major players.

Ace Hardware is promoting Father’s Day with a prize giveaway in an effort to be known as “Father’s Day headquarters.”

Pro dealers and lumberyards are also marketing Father’s Day sales.

Kent, Ohio-based Carter Lumber blasted an e-mail promotion advising customers to “surprise dad on Father’s Day and save money.” DeWalt power tools, a Milwaukee Sawzall, Stanley-Bostitch nailers and a Bosch job site radio were featured products.

Lumber 2 Home & Ranch in Oklahoma City is promoting a Case Knives Father’s Day Sale, with sale prices anywhere from $9.99 to $61.99. 

And at McCoy’s Building Supply, the 2009 HCN Pro Dealer of the Year, the McCoy’s Supply Card is described on the San Marcos, Texas-based company’s website as the perfect gift for dads.

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Barstow True Value store to close

BY HBSDEALER Staff

Anderson’s True Value hardware in Barstow, Calif., will be closing over the next four to six weeks, according to an article in the Desert Dispatch. The business, which was negatively affected by the recession and competition of a nearby Home Depot, opened two years ago, the newspaper reported.

Anderson’s True Value also operates a location in Hesperia, Calif.

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