Home center growth zoomtng still

BY home centers. the 9major growth segment of the total hardware, lumber and building materials markct, skyrocketed from zero in 1967 to $9.4 billion last year, reports a new two-volume 400 page report by Frost & Sullivan, Inc.

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Home center volume exceeded hardware store volume by more thm 50% in 7977, accounting for 29% of total hardware, lumber and building materials sales. In contrast, hardware store sales claimed a mere 19% share of the market, and is seen in a "declining status," adds the study, entitled "Home Centers and Associated Home Improvement and Maintenance Prodacfs. " The New York-based research firm considers the industry's general growth the result of a series of impor- tant demographic, sociological and economic trends occurins over the last decade. and predicts imp-ending population changes will stimulate the industry throughout the next l0 year period.

The size and scope of the "do-ityourself' market is underscored by a marked increase in residential. altera- tion and repair expenditures for owner-occupied, single family housing. "This accounts for over 9Wo of the total residcntial and repair growth, which is channeled largely through home center outlets," says the study.

Story at a Glance

Decline of hardware store volume seen in new report home improvement centers outsold them by 50% in '17 . . . hardware, lumber & bldg. materials outlets' sales expected to increase by 29o/o, home center growth to be up 58%.

The F & S report forecasts that hardware, lumber and building materials outlet sales will increase an estimated 29% over 1977 hgures, with home center growth showing a 58% overall gain.

Consumer oriented lumber and materials stores are expected to show a 33Vo rise in sales. witlr paint and home decorating centeis undergoing a 297o increase. Hardware stores will be at 24%, with contractor-oriented lumber and materials dealers lagging in sales performance.

As for the chances of market stagnation, F & S sees the geographical areas posing the greatest danger of saturation as non-metropolitan and small metropolitan conrrnunities. Corporate chains and chains served by hardware wholesaling groups will be the two dominant forces in the industry over the next decade.

Their analysis of the three types of chain operations conclusively indicates higher growth levels among consumer-oriented companies. Fifteen home center chains. ringing in size from Payless Cashways ($180 million annual volume) to Panelrama ($23 million annually), showed a 163% gain during the 1912-1977 period. By contrast, l0 contractor-oriented chains (averagtng 373% of consumer sales), though much larger in overall size. showed a considerably lower growth rate.

The U.S. Supreme Court has ruled that OSHA job-safbty inspectors need search waftants to enter a private business, but the court made it easier for the fed. agency to get warrants and no advance warning to employers isrequired...

The National Association of Manuf'acturers noted that while the court had ruled out fishing expeditions, "the bad news is that they needn't show probable cause, as in criminal cases, to secure the warrant" lUeyerhaeuser has dropped out of several major trade assn.s, including Western Wood Products Assn. and American Plywood Assn., apparently to save $$ APA lras asked the Interstate Commerce Commission to investigate the rr car shortage; the ICC's recent Portland meeting heard lumber industry gripes in depth over poor rail service in theWest...

Government moves to curb inflation have put upward pressure on the cost of money, such as moving up home mortgage rates, now at l0%,in Ca. Other factors that affeet cost & availability of money needed to buy homes look threatening: the banks' lowest lending rate (prime rate) is up to \Yz%,, savings at s&ls receded to a 5 year low in the lst quarter; the fed's discount rate on $$ is at 7%, highest in 3 years. which also increases tlie cost of monev .

Despite housing $$ sources other than thrift institutions, savings drops at s&ls are expected to lower national housing start figs. to 1.1-1.8 million this year according to National Association of Home Builders' economists the new '78 projection is still a high figure by historical standards .

Scary financial trends aside, housing starts rose 6% in April, to 2.189.000 units on a seasonally adjusted annual basis single family starts were up 4%, to 1,444,000; rnultis jumped up I I .5% to a 687,000-unit annualrate...

Building permits for future construction moved up a reassurring 6% to a projected annual rate of 1,752,000 . .bldg. per' mits rose in all parts of the U.S. but the West, where they declined 5%. . . mobile home shipments were off less than l/r, . .

The strong rate of April commercial and industrial bldg. (latest figs.) kicked the mo.'s total value of contracted construction up 7% from a year ago, to $ 13.2 billion, leading one economist to say that the "last lingering effects of the '75 recession Ihave] finally been shakenoff"...

Louisiana-Pacific and Fibreboard Corp. have agreed to delay their proposed merger until June I4 to give the Federal Trade Commission time to study the deal for possible antitrust violations L-P plans to buy a Salmo. 8.C.. sawmill from ldaho Forest Industries, Coeur d'Alene, Id., for an undisclosed amount.

James M. Thompson & Associates, Inc. is the new name for ICR Corp. of Van Nuys, Ca., Delta Forest Products has consolidated its So. Ca., operations at plush Newport Beach offices and named Kert Gagne as v.p. and gell mgr.

Valley Wood Preserving, Turlock, Ca., now offers "Woodred," a coloring agent tltat stains wltitewoods red, yet retains traditional CCA preservative values

Howard Heiner is the new owner of Woody's Olympia Horne Cenrer, Olympia, Wa., Willamette Industries is moderuizing its Sweet Home, Or., plywood plant r

Brooks-Scanlon, Berrd. Or., plans to sell its Denver bldg. mtls. distributiorr business by year+nd Boise Cascade has put its lst retail operation into Or., a 6Ya acre yard at Hillsboro . . J. P. Dotan Lumber, Fremont, Ca., suffered a $500,000 fire last mo.; arson is suspected .

Flintkote, which recently merged its Pioneer Div. into its operations, plans a new Flintkote Supply facility in Las Vegas, on a 5 acre site: their Oceanside yard is expected to be completed in Sept . Lake Shore Industries is building a new plant in Colorado to produce its steel insulated entry doorsystems...

The National Hardwood Lumber Assn. plans an eventual move of its Hq. to Memphis, where they're also bldg. a new trailring sclrool Boise Cascade has broken ground for their new Rohnert Park, Ca., retail yard; opening is set for Oct., Chas C. Meek Lumber has opened a big new store & yard in Carson City,Nv....

' six "weeks from$omblbtiori-of orf r*.- Chino-, Qa.,spre"d.'our nexf Fiogiess, ffi neport wili bein therAugust lssue, r,inere - you"ll see photographs showing our cornpleted faci$y. ..*":-d::",,{ig .

In photo "A" you can see the beginnings of our dry shed; in photo "B" the dry shed office building; photo "C" shows the foundations of our new office building; and in photo "D" the mill building6* shortly after Day One.

All of us at All-Coast anxiously await the opportunity our new home will give us to q provide you with the service, quality' ; lumber and timber you need and want.