There’s some good news and bad news for sprawl-busters coming from the
November 30th. stock analyst briefing with Home Depot and Lowe’s. The good
news came from Home Depot, which told analysts it is shifting the emphasis
from its uniform big box warehouse stores to formats that are more locally
customized, such as its “urban” stores in Chicago and Booklyn. The company
also indicated that some of its new stores will be smaller than its
traditional boxes. Home Depot said it will continue to slow down the number
of new stores it hopes to build in 2002. The company will try to foist
“only” 184 of its big boxes on often resistant communities. Finally, expect
Home Depot to diversity into new markets, such as its agreement with
ServiceMaster. Home Depot in the future hopes to be offering lawn care,
landscaping, termite and pest control, plumbing and drain cleaning. This
diversification led Fortune magazine to comment about Home Depot’s
“notoriously dysfunctional customer service”, and say: “Why, after all,
would anyone who already had a bad experience at a Home Depot willingly
subject themselves to further torture by elisting its services for pest
control?” The bad news for analyst briefings comes from Number 2 Lowe’s,
which says it plans to build 253 new stores in 2002, and again in 2003.
Unlike the smaller prototypes Home Depot is considering, Lowe’s apparently
hasn’t been listening to the anti-sprawl message from hometown America.
Lowe’s says it plans to increase the future size of its stores to make them
18% larger. More and bigger Lowe’s is just what our communities don’t need.
According to Layman’s Lumber & Panel Guide, some stock analysts say that
Home Depot is underperformkng because their new stores are cannibalizing
their existing “same store” performance, “meaning they may be getting too
big for their britches based upon how big the real market is.” Matt Layman
claims that Home Depot growth “has come at the expense of smaller dealers,
who are having a horrible year. Increased market share in a flat housing
market means someone has lost market share. In an effort to be the biggest
on the block, Home Depot may have entered markets that cannot sustain their
huge stores.” In the meantime, sprawl-busters may want to hire Home Depot’s
pest control services to rid themselves of unwanted Lowe’s warehouse
stores. Both companies are often seen as pests by community groups battling
to save their home towns.
