True Value: reports and rumors
Since reports began to swirl around a possible sale of True Value Company — or at least the consideration of such a move – the Chicago-based co-op’s CEO has downplayed the story as “rumor.”
But that hasn’t stopped rival co-ops from weighing in with their own statements. Cross-town rival Ace Hardware Corp. says it would be interested in bidding on True Value, if it were possible. And Fort Wayne, Indiana-based Do it Best Corp. says it is “considering the opportunities potentially available with our competitor,” as it pointed to its own past success in merging with Our Own Hardware in 1998.
John Hartmann, True Value’s president and CEO, downplayed the reports of a sale in a statement that was shared on a popular Google Group comment board.
“The bottom line is this: you and your fellow stockholders own the company and nothing could be done without your say,” he wrote.
Hartmann also described the True Value co-op as committed to its strategic plan, which the co-op has been busy shaping and executing since his arrival at the company in 2013. “As part of that [plan] we are continuously assessing and evaluating many opportunities in an effort to create maximum value for all of our retailers,” he said.
Speculation that Ace might acquire its cross-town rival appeared in the Chicago Tribune. However, that speculation appears to rest on flimsy ground. Ace CEO John Venhuizen, in an online statement to Ace retailers, said it was his understanding that “Ace was specifically precluded from making a bid to purchase True Value, which is unfortunate as we would have been interested in the opportunity.”
Do it Best Corp. President and CEO Dan Starr also weighed in on the potential sale of True Value. “We are certainly considering the opportunities potentially available with our competitor,” he wrote in a July 14 statement. One of those opportunities, according to Starr, would be to take on new members.
[Read Starr’s full statement here.]
At last count, True Value stores numbered 4,392. The co-op operates 13 regional distribution centers and has 2,500 corporate employees.
Other speculation in national media has suggested private equity players, big box retailers and Amazon.com as potential possible buyers. These possibilities have yet to rise above the status of rumor.
With so many independent businesses involved, it’s likely that rumors will continue to cloud the retail landscape. As True Value’s Hartmann explained in the post that appeared online: “Rumors have been swirling around True Value for longer than I have been here.”
CEO points to the value of feedback
True Value set a couple of records in 2016. The co-op’s members completed 101 remodels throughout the year, a 30% jump on its second most active remodeling year. Not only that: 68 new True Value stores opened from scratch. All told, the co-op gained about 1.5 million sq. ft. of modern retail space.
That kind of growth wouldn’t have happened without feedback from members, said CEO John Hartmann, who said the co-op responded to suggestions to make the Destination True Value store design concept more flexible and accessible to members.
Feedback is playing out in other areas, too. The co-op’s Customized True Blue assortments, which launched two years ago, are showing a clear impact on sales, he said. Sales at stores that participate in CTB are up about 5% over non-participating stores. The merchandise assortments grew out of a need to recognize more factors than small, medium and large. “We don’t want to just look at the size of the store,” Hartmann said. “We want to look at its urbanicity. Is it rural, suburban or urban? And, on top of that, we add marketplace data spend patterns into assortment, truly customizing them.”
Last year, the co-op sold 11,000 individual CTB assortments. In 2017, the co-op is on pace to sell 20,000.
And when it comes to competing with the modern giants of home improvement and the innovators of Silicon Valley, listening will play a major role again.
“Regardless of how I feel about Amazon, what really matters is what our retailers are doing to satisfy what the consumer wants,” Hartmann said. “And if I am actively listening and I’m crafting solutions both in my small format store […] and complementing that with the right omnichannel solutions, then I sleep really well at night knowing I can compete effectively in today’s marketplace.”
America’s favorite home improvement retailer is…
A smaller-format, neighborhood-oriented retailer beat out big-box competitors to rank as the nation's favorite home improvement retailer in a just-released study.
Ace Hardware, known for its neighborly service and an intense focus on the customer experience, earned the top spot, with a composite loyalty score of 63%, in a study by Market Force Information.
Menards ranked second, with a 60% score, followed by Lowe’s, with 55%, and Home Depot, with 51%. (In order to be included in the category, a traditional home improvement brand must have been selected by 100 or more respondents representing 2% or more of total. Only Ace, Menards, Lowe's and Home Depot qualified).
Market Force also looked at how the top brands fare in operational and product attributes that matter most to consumers. Ace Hardware ranked first in most categories, with particularly strong marks for ease of finding merchandise, staff service and knowledge, and speedy checkouts.
Menards scored highest for merchandise variety and value, while Lowe’s earned the top spot for parking availability. Home Depot ranked last of the brands in all service categories, as well as cleanliness and value.
Market Force’s research revealed that 60% of consumers consider themselves “DIY enthusiasts,” who not only purchase the materials and products themselves, but also complete their own home improvement projects. Another 22% fall in the “do-it-for-me” group that purchases the materials and products, but outsources the labor.
"Home improvement could be a bright light in the retail sector with remodeling projects on the rise and consumers more confident about investing in their homes,” said Ray Walsh, CEO of Market Force Information. “Our research shows that retailers must continue to focus on the customer experience to differentiate their offer and capture a greater share of this growing market, excelling in areas such as value, store cleanliness, and merchandise variety and availability.”
In other findings:
- Home Depot’s app is most popular, with 45% using it, followed by Lowe’s, Walmart, Ikea and Menards. Of the 18% of consumers who indicated they have used an app, 93% of them said the app was helpful.
- One-fifth reported that they participate in the loyalty program offered by the retailer they most recently visited. Ace Hardware’s program is overwhelmingly the most popular with 67% participation, Lowe’s ranked a distant second with 21%, Menards was third with 11% and Home Depot trailed with 8%.
- Nineteen percent indicated they have a home improvement store-branded credit card, with most choosing Lowe’s (25%) and Home Depot (21%). Just 7% have a Menards card and 3% have an Ace card.
For the home improvement rankings, Market Force Information (Market Force) polled more than 7,800 consumers. The participants were asked to rate their satisfaction with their last experience at a home improvement or furnishings store and their likelihood to recommend it to others. That data was averaged to rate each brand on an aggregation of the two measures – a composite loyalty Index.
Market Force also looked at the attributes that drive these preferences, analyzing factors such as merchandise and brand selection, cleanliness and value.