The Rich Get Richer In Growing Home lmprovement Market

Since 1984, home center and building material retail sales in the U.S. have grown an average 7.5Vo each year, according to a recent National Lumber & Building Material Dealers Association survey. Only sporting goods and home electronics retailing have fared better.

In 1994, the global home improvement market generated $300 billion in sales. The U.S., Canada and Mexico accounted for $141 billion (42Vo), including $126 billion in the U.S. The 12 countries of Europe had combined sales of $108 billion (36Vo); Japan, Australia and New Zealand, $44 billion, and South and Central America, $5 billion.

The home improvement universe consists of 26,000 home center/lumber & building material stores ($86 billion in sales); 19,000 hardware stores ($14 billion); 10,000 paint and wallpaper supply stores ($6.5 billion); 10,000 lawn and garden stores ($7 billion), and 10,000 discount and department stores ($11 billion).

The top l0 stores in the U.S. possess 397o of the market, including l5%o for Home Depot ($12.5 billion). The top 100 have 587o and the top

500 TlVo of the market. Independents hadjust a29Vo share ($25+ billion in sales) in 1994.

Home Depot is forecast to sell more hardware in 1996 than all hardware stores combined and, by the year 2000, to sell 3OVo of all lumber and building materials.

The top 10 stores in the U.S. now do 40Vo of LBM sales and expect to reach SOVo by 2000. Home Depot stores average about $l million in sales per week, with their better stores ringing in $3 million a week. The average store in the top 100 sells about $1 million monthly, the average NLBMDA member about $450,000 per month.

Depot stores serve about 900,000 customers annually. The average lumber and building material yard draws 25,000, although its average sale is larger.

Among NLBMDA independents, 55Vo do under $5 million in annual sales:22Vo, $5-$10 million; 9Vo, $lO$15 million, and l4%o, over $15 million. More than 6OVo of members serve markets of under 100,000 people.

On average, members employ 35 full-time and six part-time employees.

Ten of the full-timers and three of the part-timers are in sales. Sixty percent of their sales are to contractors.

Lumber and plywood accounts for 49Vo of their sales; windows and doors, 167o; hardware and tools, 107o; trusses, 5Vo; punt, 167o; sundries and plumbing, 8Vo, and other,l2Vo.

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"You'll never run out of ideas, We'll never run out of trees" is the message of a new ad campaign launched by a coalition of major North American trade associations to underscore the renewability of wood products.

Appearing in summer and fall issues of various trade magazines, each ad targets a specific audience: builders/remodelers, architects/en gineers and furniture retailers/manufacturers.

Campaign sponsors are: American Forest & Paper Association, APAThe Engineered Wood Association, Canadian Wood Council, National Particleboard Association, Southern Forest Products Association. West Coast Lumber Inspection Bureau and Western Wood Products Association.

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