Lowes Closing 20 outlets

[snafu]

Surprised to see Lowes closing 20 outlets. What does this say about the housing market? More jobs lost when there is already such high unemployment in this job segment. Have you looked at how your skill sets might fit other types of employment? Have you up dated your Resume/CV in the last 18 months? Are you complacent?

[disneysteve]

Originally Posted by snafu

Surprised to see Lowes closing 20 outlets. What does this say about the housing market?

I'm not surprised at all. I think both Lowes and Home Depot tremendously overbuilt. And it seems like as soon as one opened a new store, the other followed with a new store within a couple of blocks soon after. The market can't possibly support them all.

Where I live, I am within a reasonable driving distance (15-20 minutes) of at least 8 Lowes/Home Depots. I don't see how that could possibly be a sustainable business model. While I'm sorry to see people losing jobs and hate seeing big box stores sitting empty, I think this will be good for the market in the long run.

[bjl584]

No surprise here. The construction industry and the retail outlets that support them have been struggling for the past few years now. I am surprised that Home Depot hasn't announced any store closings yet though. They were in a worse position than Lowes. The shareholders like the news. Lowes is up about 2% despite the market being down over 150 points today.

[GREENBACK]

Originally Posted by bjl584

No surprise here. The construction industry and the retail outlets that support them have been struggling for the past few years now.

I think that says it all. Before the housing crisis I'm sure all those stores did plenty of buisness. Now, far fewer homes are being built and the need for the products Lowe's sells has to be down dramatically. They probably aren't counting on things trending upward very soon either.

[disneysteve]

Originally Posted by bjl584

The shareholders like the news.

Of course, because they understand, apparently better than the companies themselves, that having too many stores is bad for business. It increases fixed operating costs without proportionately increasing income. Each new store cannibalizes business from existing stores.

My wife used to be a retail manager. Her store was extremely busy as when it was built, it was the first location in the area for that company. A year later, they opened a 2nd store about 10 miles away. Guess what happened at her store? Sales fell. A while after that, they opened a 3rd store about 10 miles in the other direction. Her store's sales fell further. Upper management kept pushing them to meet the same sales targets but that simply wasn't possible because 3 stores were now competing for the same customers that 1 store had previously served.

[bjl584]

Originally Posted by disneysteve

Of course, because they understand, apparently better than the companies themselves, that having too many stores is bad for business. It increases fixed operating costs without proportionately increasing income. Each new store cannibalizes business from existing stores.

My wife used to be a retail manager. Her store was extremely busy as when it was built, it was the first location in the area for that company. A year later, they opened a 2nd store about 10 miles away. Guess what happened at her store? Sales fell. A while after that, they opened a 3rd store about 10 miles in the other direction. Her store's sales fell further. Upper management kept pushing them to meet the same sales targets but that simply wasn't possible because 3 stores were now competing for the same customers that 1 store had previously served.

There is something to be said for stores in close proximity. I've worked in retail on and off for years, and I can't remember the exact figures, but something like 80% of a typical store's sales come from customers that live 10 miles or closer to the store itself. This model works well with consumeable items like groceries, but when talking about a home improvement store, the chances of market saturation becomes a major concern. People will always come back to the grocery store to buy the same items over and over, but there are only so many houses that can be built/remodeled in a given area.

[Joan.of.the.Arch]

Am I the only one wishing it were Home Depot instead of Lowes closing stores?

[disneysteve]

Originally Posted by Joan.of.the.Arch

Am I the only one wishing it were Home Depot instead of Lowes closing stores?

Not me. I'm a Home Depot shopper. I'll only go to Lowes when Home Depot doesn't have what I'm in need of. HD is always my first choice, though to be honest, I can't say that I ever saw any real difference between the two. HD came first so that's where I'm used to shopping.

[GREENBACK]

I honestly enjoy going to my local neighborhood no name hardware store more than either of these places but, of course, they don't have nearly the inventory.

[bjl584]

Originally Posted by GREENBACK

I honestly enjoy going to my local neighborhood no name hardware store more than either of these places but, of course, they don't have nearly the inventory.

There is something to be said for shopping at the local mom and pop hardware store. What they lack in inventory they make up for in knowledge and in connections to local contractors. There is no better place to learn how to do something or to get hooked up with someone that can do a job for you than at a local small town shop. Try to get help at a big box retailer. The college kid working the floor making minimum wage could care less about your problems.

[disneysteve]

Originally Posted by bjl584

Try to get help at a big box retailer. The college kid working the floor making minimum wage could care less about your problems.

That's one thing I've always liked about Home Depot. The employees are helpful. Many times, I've asked where something was only to have the person escort me over to the right aisle and help me find the item. They didn't just say, "Oh, I think it's in aisle 27." When I wasn't entirely sure which item I needed, I've almost always found a helpful employee who was able to answer my questions and help me make a decision.

I do love mom and pop stores but, sadly, the mom and pop hardware store is pretty much a thing of the past in this area. There is an ACE Hardware store a couple of miles away but I've never been there. It isn't really conveniently located and takes just as long or longer to get to as Home Depot. And Lowe's is right down the street from HD so if one doesn't have what I need, I can easily go to the other.

[cypher1]

Originally Posted by Joan.of.the.Arch

Am I the only one wishing it were Home Depot instead of Lowes closing stores?

I've converted to Menards as number one home improvement store, with HD as runner up. Not a fan of Lowes due to cost and limited locations in my area. Menards has items more on sale, and for my location just as convenient as HD. Although I still believe HD overall has more products, love their Behr Ultra Premium paint, and definitely a wide range of experienced former contractors, plumbers, electricians from whom I've talked to.

[asmom]

Originally Posted by Joan.of.the.Arch

Am I the only one wishing it were Home Depot instead of Lowes closing stores?

I second that emotion. I find Lowe's much better than Home Depot in every way.

Having said that, while Lowe's will close 20 underperforming stores they still plan to open 10-15 stores per year going forward so it's not the end.

[mcfroggin]

Originally Posted by disneysteve

Not me. I'm a Home Depot shopper. I'll only go to Lowes when Home Depot doesn't have what I'm in need of. HD is always my first choice, though to be honest, I can't say that I ever saw any real difference between the two. HD came first so that's where I'm used to shopping.

haha I'm just the opposite. I ALWAYS shop at Lowe's. I shop their so often that I figured that I should be getting something out of it. I went ahead and bought stock in the company a few weeks back. I'm up 10% already.