Home Depot Retail Research Project

Topics: Sales, Retailing, Private label Pages: 5 (1767 words) Published: August 30, 2013
The Home Depot
Jonathan Stiffler
MKTG 1010
June 27th, 2013

Bernie Marcus and Arthur Blank founded the Home Depot in 1978. Along with investment banker Ken Langone and merchandising expert Pat Farrah, the founder’s vision of one-stop shopping for the do-it-yourselfer became a reality when they opened the first two Home Depot stores on June 22, 1979, in Atlanta, Georgia. The first stores, at around 60,000 square feet each, were enormous warehouses that dwarfed the competition and stocked 25,000 SKUs, much more than the average hardware store at that time. Empty boxes piled high on the shelves gave the illusion of even more product and in only one year they opened a 4th store in Atlanta and the company had annual sales of $22.3 million dollars. In only 10 years, on its 10th anniversary, The Home Depot opened its 100th store in Atlanta. The Home Depot is a member of the “home improvement center” category of general merchandise retailers. They have a rather narrow breadth of product, sticking with items that are used mainly for home improvement, construction or general carpentry. However, The Home Depot boasts a depth of merchandise that is very extensive. Upon walking into the remodeling area of a Home Depot, such as the freestanding location near the intersection of Morse & Hamilton, you can go into one of the many areas, such as the kitchen design center and find knowledgeable staff that can help you chose from thousands of combinations of tiles, countertops, appliances and even paint. They don’t stop there, however, as they carry over the depth of merchandise into all areas of the home improvement market. You can find thousands of shades of paint or wallpaper and do it yourself tools just a few isles down from raw untreated wood that carpenters would use to build a house from the foundation up. The Home Depot is the fastest growing retailer in U.S. history. Home Depot is the largest home improvement retailer and the second largest retailer behind Wal-Mart in the United States based on net sales for the 2005 fiscal year. In 1981, the company went public on NASDAQ and moved to the New York Stock Exchange in 1984. The 1980s and 1990s spawned tremendous growth for the company, with 1989 marking the celebration of its 100th store opening. The company arrived in Canada with the acquisition of Aikenhead’s home improvement centers in 1994. In 2003 Home Depot opened its 100th Canadian store. Home Depot began flying its flag proudly in Mexico in 2001 through the acquisition of Total HOME. In 2006, the company extended its reach to China by acquiring The Home Way, a 12-store chain. Home Depot had over 40 acquisitions from 2001 to 2006 alone with 21 being completed in 2005. The Home Depot has been one of the pioneers in the retail industry that has changed the game as far as businesses present their private label brands. The general idea was thought of in 1978 when Home Depot aligned to sell only BEHR paints and BEHR was to only sell their products through Home Depot. This allowed Home Depot to utilize BEHR as a private label brand without having to build/purchase the proper facilities to produce the paint. The end result allowed them to offer a private label brand (often referred to as a “store brand”) that was up to par, if not better then many national brands. They have this same exclusive sales agreement with many private merchandise producers such as; Martha Stewart Living, Hampton Bay ceiling fans, Chem-Dry cleaning chemicals and GAF Roofing. Not only did Home Depot pursue these companies to turn them into in-house brands, they also created three of their own private label brands that are shown around the store. These include Husky Tools, Workforce Tools & Accessories and Glacier Bay Hardware. Due to their innovation and willingness to take risks, by 2005 net sales had increased 11.5% to $81.5 billion. According to the Home Depot management this was due from an increase in comparable stores sales...

Cited: Davis, Scott. “How Target, Walgreens And Home Depot Have Forever Changed The Private Label Game.” Forbes.com. 5/23/2013 < http://www.forbes.com/sites/scottdavis/2013/05/23/how-target-walgreens-and-home-depot-have-forever-changed-the-private-label-game/>
PR Dept. “E-commerce Face-Off: Lowe’s vs. The Home Depot.” ECommerceOuttakes.com. 1/23/2013 < http://ecommerceouttakes.com/2013/01/23/e-commerce-face-off-lowes-vs-the-home-depot/>
Aravosis, John. “Home Depot dumps O’Reilly.” AmericaBlog.com. 7/31/2007 < http://americablog.com/2007/07/breaking-home-depot-dumps-oreilly-we-will-not-advertise-on-the-bill-oreilly-show.html>
PR Dept. “Our History.” HomeDepot.com. 2013. < https://corporate.homedepot.com/OurCompany/History/Pages/default.aspx>
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