A Citizen’s View of Home Depot on Home Services

Nov

A Citizen’s View of Home Depot

posted by admin in Home Depot

All across America, the headlines in daily newspapers describe a battle between citizens’ groups and a company that one magazine describes as “America’s most admired retailer”. If Home Depot is so admirable, why are so many community groups and homeowners fighting hammer and tong to keep them out? Here is another side of Home Depot that you won’t find in their Annual Report. Thousands of local residents are engaged in the Orange Wars–an effort to save their home towns from Home Depot.

Home Depot, the company with the orange box logo and the cartoon carpenter with his cap pulled down over his eyes, is proud to tell you that they are the world’s largest home improvement center retailer. In March of 1997, HD passed the 500 store mark. Sales topped $19,500,000,000 in 1996, and are projected to reach $24,000,000,000 in 1997. The company plans to open 111 new stores in 1997–one ribbon-cutting every three days. By 1999, Home Depot wants 930 stores operating. By comparison, their nearest competitor, Lowe’s, had roughly 402 stores as of January, 1997.

HD was founded by Bernie Marcus and Arthur Blank, who tell their employees that they were fired from Handy Dan, a California company. Bernie was the President of Handy Dan, Arthur was VP for finance. They didn’t like how Handy Dan operated, so they started a new company called Home Depot, which opened its first stores in Atlanta in 1979. Home Depot notes that Handy Dan is a “former home center retailer” that is now out of business.

Home Depot is targeted primarily towards DIY: do-it-yourselfers. The new concept was to create a store that made you feel like you were in a wholesale warehouse, which HD describes as a “no frills environment with a simple merchandise presentation that reduces overhead costs and allows us to pass those savings on to the customer in the form of lower merchandise prices”. The typical HD has 11 departments (lumber, building materials, flooring, paint, hardware, plumbing, electrical, lighting, garden, kitchen & bath, millwork, and decor). The average store is 105,000 square feet. According to HD’s 1995 Annual Report; sales per store at HD was $787,000 per week, or $41 million a year. Sales per square foot at a HD ranges from $340 to $390, depending on which company source you believe.