Two stores. One block. Game on.
Two family-owned hardware stores, an Ace and a Do it Best, are going up against each other on the same block in Minneapolis, according to a news report on KSTP-TV. Although the owners remain friendly, the competition is not.
Bayers Do it Best hardware has operated the only hardware store in the Linden Hills neighborhood of Minneapolis for 88 years. Owner Bob Bayer said he was surprised when a longtime neighboring store that specialized in general merchandise decided to expand six weeks ago and become an Ace hardware dealer.
“Our customers drove this decision,” said Mark Settergren, whose family also operates a Settergren Ace Hardware at another Minneapolis location.
The two dealers briefly discussed merging the operations but could not come to terms, according to the article.
Although it is now the smaller hardware store, Bayers Do it Best Hardware has decided to bring in convenience items like food to distinguish it from the new Ace dealer. “We know we can have better prices and beat them at that game,” Bayer said.
Settergren, whose family has been in the retail business for 116 years, said he’s not looking for a fight. “This is not a hardware war at all,” he added. “It’s win-win for everybody.”
Bayer disagrees. “Are we at war with each other, competing? Yes we are.”
Census Bureau’s advance monthly sales creep upward
The U.S. Census Bureau reported that advance estimates of U.S. retail and food services sales for October were $397.7 billion, an increase of 0.5% from the previous month and 7.2% above October 2010.
Building material and garden equipment and supplies dealers (NAICS 444) increased slightly from month to month, improving to $25.770 billion, up from $25.388 billion in September. Compared with a year ago, sales of 444 category retailers increased 5.6%, according to the report released Tuesday morning.
The figures are adjusted for seasonal variation and holiday and trading-day differences, but not for price changes. Total sales for the August through October 2011 period were up 7.6% from the same period a year ago. The August to September 2011 percent change was unrevised from +1.1%.
Retail trade sales were up 0.6% from September 2011 and 7.3% above last year. Nonstore retailers sales were up 11.1% from last year.
On an unadjusted basis, the government data showed hardware stores in September — the latest month of available data — had sales of $1.644 billion, down 8.1% from $1.788 billion in October. but up 9.9% from $1.496 billion in September 2010.
Hardware stores ‘gaining momentum,’ says NPD study
Consumer research from Port Washington, N.Y.-based NPD Group indicates that the home improvement industry grew 2% in the 12 months ended September 2011 compared with 2010. Specialty retailers and online shopping are making significant gains, and hardware stores are also “gaining sales momentum,” the research showed.
Home improvement, as tracked by The NPD Group, includes categories in hand tools, power tools, outdoor power equipment, storage and organization, faucets and shower heads, lighting and electrical, fans, and caulk/glue/adhesives.
Specialty retailers increased 18% across the home improvement categories tracked by NPD in 2011 versus 2010 dollars. The categories with the most noteworthy increases in the specialty channel — storage and organization, and lawn and garden products — both experienced strong double-digit growth over the past two years.
Hardware stores increased 4% on a dollar basis, compared with the 12 months ended September 2011. While other channels, like warehouse home centers and warehouse clubs showed modest growth in the 12 months ended September 2011, it wasn’t enough to keep up with specialty and hardware store growth, the study said.
Online shopping has also seen significant growth, with dollar sales up 24% over 2010. Online now represents 5% of all home improvement sales, but it is even more important in the specialty channel, representing 20% of those sales, with kitchen and bath specialty stores leading the way in the 12 months ended September 2011. Though still accounting for the lion’s share of the market, home improvement brick-and-mortar sales are down over the last two years.
According to The NPD Group’s consumer tracking service, while price continues to be the top factor in selecting a retailer, a quarter of home improvement consumers now tell NPD their primary reason for shopping at a given retailer is that it is close to their home. And, for consumers shopping in specialty stores, selection and availability are more important than proximity to their homes.
“Since the start of the economic downturn we’ve entered a new mind-set as consumers,” said Kevin Gilbert, director, The NPD Group. “People are getting back to their roots and putting an emphasis on supporting local, homegrown businesses. The aging population is becoming disinterested in traveling outside their home town to a large store, especially with rising gas prices.”