Softer approach pays off for Home Depot
Store refubs boost third quarter sales
November 18 2003
The Home Depot has seen its best quarterly increase in same store sales for four years.
The world’s largest home improvement retailer has announced a 22 per cent rise in quarterly profits as its core US customers respond to new marketing initiatives designed to drive sales recovery.
Home Depot is also investing heavily in store refurbishments and technology, all designed to fend off growing market share by rival Lowe’s, which has established a more female-friendly store image. Home Depot said over the last few months its stores have taken on a softer look.
The stores are said to be brighter, aisles are cleaner and more employees are out on the floor supporting customers. Hundreds of self-checkout terminals have been installed to make the buying process quicker.
Home Depot profits rose to $1.15 bn in the quarter to November 2, up from $940m a year ago. Same store sales rose 7.8 per cent, with total sales up 15 per cent to $16.6bn. Average customer spend per visit grew 4.9 per cent to $52.10.
Home Depot chief executive Bob Nardelli said: “Our customers are experiencing a better shopping environment as a result of the significant progress we are making in every area of our business.
“Our continued focus on sales, service and execution is resulting in innovative and distinctive product selection, compelling values, and knowledgeable store associates.”
Howver, despite the improvement Home Depot’s growth is still lagging behind its rival. Lowe’s has reported a profit of $452m for the third quarter, a 33 per cent jump on a year ago. Same store sales were up 12.4 per cent.
Home Depot operates 1,643 stores in the United States, Canada and Mexico.
