Demand dips for lawn and garden products
Unfavorable weather patterns, lower home values and rising fuel and energy costs conspired to limit demand for lawn and garden products in 2007, according to market research firm Freedonia Group.
Consumer demand for fertilizers, pesticides, soils, mulch and other garden products hit a snag last year when parts of the United States experienced a cold spring and drought conditions throughout the summer, according to a recently released study by the Freedonia Group. Spending on packaged lawn and garden products in 2007 was also dampened by rising fuel and energy costs, as well as lowered home values, the study said.
Going forward, the Freedonia Group projected an annual 4.5 percent rise in lawn and garden sales, with consumers spending approximately $9.3 billion in 2012. The graying of the Baby Boom generation will boost demand, especially for products that extend living spaces like patios and decks.
Other growth categories listed by the study are: fast acting and easy-to-use fertilizers; rubber and colored mulches; and premium soils. Increased concerns over the use of synthetic fertilizers and pesticides will provide opportunities for organic products, which are expected to undergo substantial improvements in effectiveness, availability and marketing, as well as lower prices.
Ace tops retailer customer satisfaction survey
Ace Hardware ranked highest in customer satisfaction for the second consecutive year, according to results of the annual J.D. Power and Associates 2008 home improvement retail store study.
The study, in its second year, measures customer satisfaction with home improvement retail stores, based on performance in five factors: merchandise, price, sales staff, sales/promotions and store facility.
Ace Hardware received a score of 791 on a 1,000-point scale, performing particularly well in the sales staff and store facility factors, which are “the two most important factors driving overall customer satisfaction,” according to a statement from J.D. Power.
Lowe’s (784) and Menards (779) follow Ace Hardware in the rankings. Lowe’s performed particularly well in merchandise, while Menards did best in sales/promotions and price factors. True Value also performed above the industry average of 768 with a score of 774.
“Ace Hardware is particularly successful in pleasing customers with their knowledgeable and helpful sales staff,” said Dale Haines, senior director of the real estate and construction practice at J.D. Power and Associates. “While offering a wide selection of merchandise and low pricing are important, customers tell us that being able to get the assistance and advice they need to complete their projects correctly the first time [is important].”
Sears fell just under the industry average with a score of 767, while Home Depot fell into the last slot with a score of 753.
Sixty-one percent of customers say they asked for help from store employees on their last visit to their primary retailer. Customers who say they are highly satisfied with their primary retailer’s sales staff spend an additional 4 percent of their budget at that retailer.
“Not only does providing great customer service benefit retailers in terms of more satisfied, loyal customers, but it also results in increased sales,” Haines said.
The 2008 Home Improvement Retail Store Study is based on responses from 9,770 consumers who purchased a home improvement product or service within the previous 12 months from a store that sells home improvement products.
Home Depot holds analyst meeting
Customer service was again the chief topic of conversation for Home Depot executives, with an added in-depth discussion of the retailer’s distribution network at the annual Home Depot analyst meeting, held today.
In addition to his usual talk on “Aprons on the Floor,” the retailer’s initiative to help improve customer service, Home Depot CEO Frank Blake discussed other factors in customer service, such as store appearance, that impact perception by consumers.
“We don’t have to have an environment that’s like a Target, but [our customers] do want a clean and uncluttered store,” he told analysts. He also reiterated company initiatives to focus on core DIY products, a commitment that led to, in the past year, selling HD Supply, closing Home Depot Landscape Supply stores and closing the retailer’s floor stores. The company also has ongoing plans to refocus home services.
Craig Menear, executive vp-merchandising, discussed the importance of proprietary and exclusive brands to sales in stores. He highlighted programs with Andersen Windows, Ryobi tools, Behr paint and Thomasville kitchen cabinets and flooring. He also said a recently launched patio furniture program from Thomasville has been a “tremendous success.”
Chris Webber, an analyst with J.P. Morgan, asked about the revamping of distribution centers, a major nationwide Home Depot initiative. Webber likened the process to a difficult operation, as though “you’re replacing your arteries over a very short period of time. What are your fears in that process?”
Mark Holyfield, senior vp-supply chain, said, “We don’t have a lot of worries about the capabilities of the system,” but the retailer is more worried about training the people who work within that system quickly, he added. “We’re building a distribution culture. We’re setting up an academy to train managers to be sure that they know what they need to know about running a Home Depot RDC,” he said.
The analyst conference, held in Atlanta, concludes today at 11:30 a.m.