In a looking at a retail sector that’s been dealing with headwinds, Numerator updated its Home Improvement Tracker and demonstrated that Home Depot retains a considerable lead over rivals in overall spending.
Home Depot has been actively expanding its business to become an even more dominant home improvement player. The company recently announced it had entered a definitive agreement to acquire SRS Distribution Inc., a residential specialty trade distribution company that works across several verticals serving the professional roofer, landscaper and pool contractor businesses, for a total enterprise value, including net debt, of $18.25 billion.
SRS operates a 2,500-plus professional sales force and 760-plus branch network across 47 states, Home Depot noted, together with a 4,000-plus truck fleet and jobsite delivery capabilities. The acquisition will enable Home Depot to extend its professional offering to residential specialty trade pros while better serving renovator/remodelers, the company maintained.
Numerator, in tracking purchase data and surveying verified buyers to understand shifts in consumer behavior, indicated Home Depot captured 28.1% of home improvement spending, while Lowe’s won 17.3% and Amazon 15.8%. Consumer reasons for purchasing from a specific retailer included convenient location, at 44.2%; best prices, at 43.9%; and product options/availability, at 36.1%.
Macroeconomic factors, including inflation along with high mortgage and other loan rates resulting from it, have put a damper on home improvement retail sales. That doesn’t mean consumers aren’t making improvements around the home. They are just doing so in smaller increments.
Consumers who purchased home improvement items in the past three months said they did so because they needed supplies for a small DIY project, at 33.5%; were replacing a damaged/broken item, at 14%; or just wanted the particular item, at 13.5%, Numerator stated.
Among home improvement operators, Numerator noted, segments that generated the greatest additions to household penetration were household cleaners and cleaning tools, now at 98.6% household penetration; lawn and garden, now at 86.4%; painting supplies and wall treatments, now at 64%; and hand tools, now at 50.4%. On the other hand, kitchen and bathroom, power tools and outdoor power equipment all saw declines in household penetration and buy rate, suggesting consumers were pulling back on bigger-ticket items.
Although most home improvement categories are dominated by name brand products, private-label brands, according to Numerator, have their largest share presence in hand tools, at 40.1%; lawn and garden at 22.5%; and kitchen and bathroom, at 22.5%.
