Home Improvement

This sector — consisting of made-over lumber yards, hardware stores and building supply dealers — was spawned in the 1970s, when consumers were enthralled with fixing up their homes through various do-it-yourself projects.

DIYers prefer to live with their own handiwork rather than pay contractors. That enthusiasm returned in the depressed financial aftermath of the burst housing bubble, when many homeowners found themselves in houses they couldn’t sell — or unable to find financing for a new one. However, rising commodity prices and a run of extreme weather have worked against the likes of The Home Depot, Lowe’s, Menard and their hardware/home center cooperative rivals Ace Hardware, True Value and Do it Best.

Sales haven’t been great, but they could be worse, so the big chains remain cautiously optimistic. “Our sales declined slightly due to a slow spring selling season,” says Frank Blake, chairman and CEO of The Home Depot, “but for the year we expect sales to grow” approximately 2.5 percent. Lowe’s, which had a weaker start to the year, was more cautious, cutting its outlook for the full year. “Customers may feel better about their employment situation but are uneasy due to higher fuel, clothing and food costs as well as geopolitical issues around the world,” says CEO Robert Niblock.

Ace Hardware is busy reminding its members that the shopping experience and customer service can be points of differentiation from national chains. “We’re very clear that our mission is home maintenance and repair, while they’re about home improvement,” says Rich Neal, Ace’s One-to-One manager and head of the Ace Rewards loyalty program.

Differentiation means something else to Menards, whose stores typically run to more than 200,000 sq. ft. When a 25-year-old store in the Minneapolis-St. Paul market was remodeled recently, new features included a convenience grocery department selling items like frozen pizza, dry groceries, milk, snacks and boxed dinners. The store also includes a new pet and wildlife department.