Solid Growth Seen For Home Centers

By Leonard F. Gertler Vice-President All American Home Center Downey, California

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nomists, with all their education, facts, computers and other sophisticated tools cannot agree on the future of the U.S. economy, so it would be foolhardy for me to try and predict where the U.S. economy is going.

I will, however, hazard some predictions based mainly on the fact that we will have a new administration in Washington next January. Undoubtedly, the Carter administration will be economically more activist. I'm sure we will see the following things happen all of which will have an economic effect on us as Americans and as businessmen: Carter will act to stimulate employment, he will also attempt to restructure many federal agencies and bureaucracies, in the process creating fewer but more powerful agencies. These super agencies will be more environmentally and consumer oriented and less open to pressure by business.

The preceding, while socially positive, will most probably act to increase our already high rate of inflation, as will the expected OPEC oil increase. If inflation does increase rapidly, moving into double digit figures, I would not be surprised to see the Carter adminislration impose some type of price controls.

If what I've said above is an accurate prediction then I think we can expect to see higher sales because of increased employment, and higher cost due to the hisher rate of inflation.

Story at a Glance

Strong sales increases for home centers, followed by an increase in inflation resulting in higher expenses and perhaps price controls the home center industry will continue its strong growth in the future.

Now as to my specific industry, the home center industry, that is retailers who are all or nearly 100% consumer oriented. For the past 10 to I 5 years, our industry has seen an explosive growth, in California and within the last five years nationally. Our industry is only slightly related to the construction industry and as such has not been subjected to the recent building recession.

In the forseeable future. I continue to see a strong, steady growth for the home center industry. I think this is particularly true because of these four factors:

( I ) As costs of new home construction and financing continues to skyrocket, more people are spending money to improve their own homes and more of those people are doing it themselves.

(2) The high cost oflicensed tradesmen have encouraged more people to make all types of home repairs themselves.

(3) Growing leisure time has given people more time to spend working around their homes.

(4) More and more women have learned that work around the home is something they can do as well as men.

I expect to see all areas of our industry, that is, hardware, plumbing, electrical, paint, garden, building materials. etc.. continue to show strong growth.

I would hope to see building materials and lumber manufacturers and distributors pay more attention to the particular needs of the home center industry.

During the past two or three years, as construction has fallen, we have seen more interest expressed in our industry. I would hope to see this continue. The building materials and lumber industry has to pay particular attention to our needs in the fields of packaging, advertising and distribution.

I would sum up my expectations for 1977 as follows: I expect to see a strong sales increase, followed by an increase in the rate of inflation, resulting in an increase in our expenses and perhaps price controls. The home center industry will continue its strong growth in the forseeable future and hopefully more building material suppliers will take the needs of our industry into their future plans.