Home Center Merchant

Bill Fishman

Bill Fishman & Atfiliates

Tired of treated lumber that cracks crooks, and twists, and end checks and splits, and is hard to saw, and splits again when you nail it?

THERE IS A BETTER TREATEDLUMBER...

DURA.TREET

Iio

It is a natural golden brown color and retains its easy working characteristics. That's because it doesn't need extreme drying temperatures before or after treating. Whether buying for resale or treating for your best cutomer, it will mean more $$$'s for you.

When marked with the Dura-Treet Ouality Mark it meets all AWPA, REA and Uniform Building Code requirements.

For more information. call or write.

Jim Cooney Director of Marketing IDACON,

INC.

10611 Harwin Drive Suite 400 Houston, Texas 77036

(713) 988-9252 lr(x,stoil.lErls

11650 lberia Place San Diego, Ca.92128

ElesenncHERs in the home cenrer I Iindustry are overlooking a market segment that should be more independently identified.

Most consumer research classifies in two broad categories: (A) the ContractorlBuilder and (B) the Do-it-yourselfer (sometimes tagged the "consumer," "home-owner" or the "cash customer. ") ln the metropolitan markets these broad categories are probably sufficient to determine a retailer's marketing position, merchandise mix, and most appealing operational policies.

However, in the rural areas a 3-way split would be more meaningful: (l) Builder/Contractor, (2) Do-it-yourselfer and (3) the cash customer buying to do a home improvement project for someone else.

This third group is comprised of semiprofessionals, building or installing for profit. They opcrate without offices, business stationery, business banking accounts or licensing. Many are the moonlighting policemen and firemen types picking up their second income doing home repair/home improvement jobs for friends and neighbors.

With housing starts down, my office is receiving more and more calls to work with building material dealers who want to change their ratio of contractor to retail business. The reasons are obvious. The new construction industry is seasonal, greatly dependent upon fluctuating interest rates, and highly susceptible to bad debts. On the other hand, the trade papers boast about the higher margins and a more consistent cash flow in the do-it-yourself business.

Step one in capturing more d-i-y business is the taking of a mail, telephone, and in-store survey to determine the retailer's positioning in the marketplace. Heretofore we accepted management's typical estimates of a 7O/3O or 6O/4O "retail" to contractor ratio. They establish these ratios by assuming all charge sales are contractor/builder and all cash sales are retail. But when we dig deep, we find that an extremely large percentage of the cash sales business falls into the semi-professional category. Recently we've altered our consumer surveys to attempt to determine how much of the clientele reallv buy for resale. (Not an easy task in those states where the moonlighters are theoretically violating state licensing laws.)

Ironically, the home center industry almost totally neglects this market segment. They do a poor job of identifying them, acknowledging them, and promoting to their needs. By necessity, this group must buy sharper-and they have an understandable need for larger-thantypical short term but frequent financing.

Slowly, retailers are seeing a need to develop separate direct mail progr:rms to this specialized market. The retailer's goal should be to keep these big ticket semi-professional buyers as captured accounts, and to eliminate their need to shop around town for the lowest bid on each commodity item. But, first the;" must be identified. lt requires the alertness, tact, and cooperation of the building material dealer's retail countermen. They know who these customers are. Ask 'em!

Niebling

(Continued from page I5) own industry. These industries have either over-capacity or obsolete plants or both. Until the "survivors" can obtain the proper return on investment, the "world class" new plants will not be built . . . and our economy will not surge until there is a substantial increase in capital spending.

Yet we are optimistic. Why?

It is clear that one of the biggest chores of the'80s will be the repair of our infra-structure. We are talking about roads, bridges, transportation terminals, waste disposals, pipelines, prisons, etc., etc. That's where the action will be. While these industries will require experts, computer programmers and engineers, it is also true that truck drivers, laborers, flagpersons and others will also be needed. We would suggest that here is where the answer lies as opposed to the growing idea of protectionism in the marketplace.

How does this all relate to forest products and housing for 1983?

The desire and demand for housing is out there. It is not 2 million starts ayear and hasn't been for some years. Nevertheless, we see a200/o increase in housing starts next year to 1,175,000 units.

Industrial wood markets should also be better. As interest rates decline and industry slowly recovers, we think improvement of l0-1590 over 1982 is both logical and possible.

The important remodeling and doit-yourself market may be somewhat "soft" in the early months of 1983. The unemployment figures are scary, and the consumer shows every indication of remaining conservative until things look better. This improvement should and could occur by spring. In terms of volume and demand we forecast all of 1983 to be about the same as 1982.

The past and current promotion of overseas lumber export markets by both Canadian and U.S. manufacturing groups should result in gradual improvement next year.

Finally, if our scenario is a correct oD€; w€ project still another market for wood products that has great potential. If there is to be only gradual improvement in wood products markets over the next few years, the industry might really get serious about the light commercial market.

To quote a noted television religious leader, we feel that 1983 will bring some better times for some in the industry. "Tough times never last but tough people do."

Dill

(Continued from page 91 crease of about 3590. Single family starts would rise more strongly than multi-family starts. Interms of Gross National Product, residential construction in real terms should be up about 2590 in 1983 after declinine 990 in 1982. Additions and alteral tions to existing residences should be up about 690 in real terms next year compared with a 790 increase in 1982.

Wholesale lumber and wood product prices should rise 690 to 990 next year and total residential construction costs should rise 490 to 7 9o The median sales price of new one-unit homes could be expected to increase 8q0 to l0q0 next year after rising only around 3a/o in 1982.

While all the above are considered most likely, many positive or negative contingencies could develop next year. On the positive side, interest rates and inflation could continue to come down more rapidly than anticipated, producing the potential for an even stronger rebound in markets for building products. On the other hand, the conflict between very large federal deficits and monetarv restraint could re-emerge once the economy begins to expand, a situation which could produce sharply higher interest rates and another recession in housing activity.

The anticipated national economic recovery in 1983 would certainly have a beneficial impact on the southern states.

Those areas of the South which have been most adversely impacted by recession, namely the durable goods industries of the middle South, should receive the greatest relief as the economy recovers and the demand for durable goods picks up.

However, activity in depressed industries is likely to stay far below boom levels. Those areas of the South which suffered the least during the recession, will experience a pickup in growth next year, but not a dramatic one.

While energy demand should pick up somewhat next year, energy prices will not escalate significantly, which means that the oil and gas industry in the middle South will not be a strong engine of economic growth in 1983. However, the South's many housing related industries, such as lumber, carpeting and furniture, should experience a moderately strong recovery in 1983. All things considered, 1983 could be the economv's best year since at least 1979.