Companies in this industry sell building supplies, lumber, hardware, tools, and other home repair and improvement products. Major companies include Home Depot, Lowe's, and True Value (all based in the US), as well as Kingfisher (UK), Leroy Merlin (France), OBI (Germany), and Lowe's-owned RONA (Canada).
Home remodeling and repair and new homebuilding drive demand. The profitability of individual companies depends on low-cost purchasing, effective merchandising, and competitive pricing. Large companies can offer wide selections, supply high-volume goods to builders, and have advantages in purchasing, finance, distribution, and marketing. Small companies can compete by offering specialty products, providing superior service, or serving a local market. The home center segment of the industry is highly concentrated: the top two companies dominate. The hardware store segment of the industry is fragmented: the top 50 US companies account for about 35% of segment revenue.
Products, Operations & Technology
Major products for US home centers include lumber and building supplies (about 35% of sales); hardware, tools, and plumbing and electrical supplies (25%); lawn and garden products (10%), and paint and sundries (10%). Hardware stores tend to make more of their sales (about 60%) from hardware, tools, plumbing, and electrical supplies. Building supplies include doors, windows, masonry supplies, cabinets, and countertops. Lawn and garden supplies include lawn care machinery; outdoor nursery stock (trees and shrubs); and fertilizers. Home centers often carry a full line of appliances. Companies may also offer installation, delivery, design, or tool rental services. Services represent about 5% of industry leader Home Depots total sales.