Home Depot Case Study

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CSR Case Study: The Home Depot Giving back to communities

Prepared for:

Interdepartmental Working Group on Corporate Social Responsibility (CSR)

Corporate Social Responsibility: Lessons Learned

Final Home Depot Case Study

1 Corporate Overview
Home Depot was founded in 1978, and has grown to become the world’s largest home improvement retailer and the second largest retail chain in the USA with total sales of $53.6 billion in 2001. The company employs a workforce of more than 250 000 “associates” in 1436 retail locations of which there are 18 000 associates and 83 locations in Canada. It plans to open 600 new stores in the next three years. Home Depot also operates in Mexico. Home Depot specializes in building materials, home improvement supplies and lawn and garden products. The company has been recognized as an innovator in the home improvement retail industry for combining the economies of scale of a warehouse format with the high-level of customer service of smaller retailers. Home Depot stores are large—typically, 114 000 square feet—and offer between 40 000 and 50 000 different products. Home Depot also wholly owns: EXPO Design Center, a one-stop design and decorating retailer;; Maintenance Warehouse (“Commerce Direct in Canada a supplier of building repair and replacement products to owners of multi-family housing and commercial properties; Georgia Lighting, a distributor and retailer of in specialty lighting; Apex Supply Company, a wholesale distributor of plumbing; Your “Other” Warehouse, a premier plumbing distributor with a focus on special orders; and, Home Depot Landscape Supply, serving landscape professionals and garden enthusiasts.

2 Business Context
The retail industry is one of the largest sectors of the North America economy. In Canada, it represents about 6.5 percent of total gross domestic product or value-added in the economy and provides 12 percent of all jobs. The majority (72 percent) of retail firms are small, owner-managed businesses with less than five employees. However, certain segments of the sector such as clothing and general merchandising are dominated by large retail chains, with multi-million dollar sales figures. These chains include Wal-Mart, Home Depot, Ikea and the large department stores. The retail industry is characterized by strong competition in a marketplace with a high number of failures, many new entrants, and constant innovation by large and small firms. As a major employer, the industry is an important access-route for new job-market entrants. It is also a key employer of part-time labour and employees who have traditionally been drawn from the youth segment of the labour force. Technology is becoming increasingly important for retail success. With the advent of low-cost computing, large and small retailers are becoming more dependent on information technologies to assist them in decision making and management, and in keeping inventories low. They are also using the internet to build partnerships with their vendors to help drive down costs and improve environmental performance in their supply chains. Online sales of 2 / 19

Corporate Social Responsibility: Lessons Learned

Final Home Depot Case Study

products over the internet offer retailers a low-cost platform for reaching consumers, but such transactions still represent a small, but nevertheless growing portion of their total sales. Most industry analysts believe that the online marketplace is where the next wave of activity will be concentrated. In general, the transition to online retailing has been easier for the large wellestablished chains. Over the last few decades consumer interest in the environmental consequences of the products they use has grown, which has led to the growth of a large industry to provide environmentally preferable products. For the retail industry, one of the first environmental issues it faced was the origins of the wood-using products it sold and their effect on...
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