1.The Home Improvement Industry consists of companies which sell goods and offer services that are used to improve the quality, value, and living situation of residential housing.
2.Revenue of the industry is 159 billion(US Dollar)
3.Annual growth for the period 2007-12 is -2.8%.
4.It came to existance post world war ii intensifying price competition and the continued dominance of the industry's top players keep profit down.
5.This industry includes stores that sell a broad range of home repair and maintenance goods like hardware, tools and electrical goods, as well as lumber and structural material for construction and renovations. Stores that focus on a specific area like flooring or wall coverings are excluded from this industry. Operators purchase goods from domestic and international manufacturers and wholesalers and sell them to end-users, such as do-it-yourself consumers and professional contractors.
6.Home improvement is the process of renovating or making additions to one's home. Often, a professional handyman is hired to perform the improvements but, typically, most improvements are done on an amateur DIY basis by the homeowner.
7.Several major retailers, such as Home Depot and Lowes, specialize in selling materials and tools for DIY home improvement. These stores even host classes to educate customers how to do the work themselves.
8.U.S. Census data show a boom in home repair and improvement between 1982 and 1992: a 115% increase, the largest of any 10-year period 1975-2001.
9.With housing markets still weak and consumer spending falling generally, the
10.The industry is slowly trying to regain composure, as more people continue to invest in renovations and remodelling again. Even before the recent economic recession, Americans who were obsessed with fixing and re-fixing their homes were the catalyst to the rise of the multi-billion dollar home improvement industry, which also encompassed magazine publications, TV shows, and the opening of thousands of home improvement stores. Now, the improvements seen in disposable income and housing market have boosted the purchases of the home improvement industry, but competition between the top players of the industry and the increasing retail prices have kept profits down for a lot of companies.
Major Players
Home depot and Lowe’s company INC
11.Home Depot Focuses on Three Customer Groups
_ Do-It-Yourself — These customers purchase materials and complete projects and installations on their own. Home Depot also has a number of workshops to help broaden the customer base within this category. For example, the Company offers Home Depot University, which is a four week program teaching customers the different facets of a particular home improvement topic.
_ Do-It-For-Me — These customers hire third parties to complete the home project or installation. HD offers installation services through third party contractors.
_ Professional Customers — This customer group consists of professional contractors and tradesmen.
12.The Company has been undertaking a number of initiatives to help increase customer loyalty and thereby grow sales. One of the most notable is its self-checkout stations which has reduced customer queue time by 40% and has redeployed human capital to the selling floor to better help the consumer. The Company redesigned some of its stores with brighter lights and better layouts to improve the shopping experience. In our opinion, these are positive moves that will help HD on its way to correct the customer service issues it had faced about a year ago.
Lowes
13.Lowe’s, like Home Depot, serves both retail and commercial business customers. Its retail base consists of ‘Do-It-Yourself’ customers while its commercial business caters to professionals including contractors, electricians and landscapers. The Company is focused on improving and developing its Installed Sales and Special Order Business divisions and building the LOW name by bringing in quality merchandise only available at Lowe’s.
14.Sandy "will certainly help the home improvement sector in the next few quarters".
Home Depot has been taking market share from rival Lowe's Cos Inc (LOW.N[->0]) with the help of better pricing and customer service, analysts have said. Lowe's, which has lagged Home Depot in same-store sales for 13 straight quarters, plans to report its results next week.
15.The boom in home sales and better deals for mortgage loans is helping Lowe’s and Home Depot’s business.
16.If we think about competition in the home improvement business we just get two big names Home Depot and Lowe’s and two privately held companies Menard Inc and Sears, Roebuck and Co
17.The company is currently implementing a cost cutting strategy that includes layoffs and a slowdown in expansion. Its lack of promotional campaigns has resulted in a loss of customers who have been moving to its bigger rival Home Depot (HD[->1]).
[->0] - http://www.reuters.com/finance/stocks/overview?symbol=LOW.N
[->1] - http://seekingalpha.com/symbol/hd 