Hardware Retailing January 2024

Volume 226 • Issue 1 • January 2024 • hardwareretailing.com

Serving Hardware, Home Center & Building Material Retailers

Published by the North American Hardware and Paint Association

2024

Market Measure Reflections on Weather, Inflation and Price-Conscious Consumers Page 22

NEW

Experts Talk Strategy, Innovation & More Page 8

Constructing an LBM Strategy for Growth Page 38

JANUARY ISSUE SPONSOR

CALL FOR 2024 NOMINATIONS

Recognizing young leaders who represent the future of independent home improvement retailing

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North American Hardware and Paint Association

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28TH Do you know an inspiring young retailer?

Submit your nomination by February 28, 2024.

Learn more at YourNHPA.org/yroty.

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Nominations are now open for the 2024 Young Retailer of the Year awards!

12/14/23 11:31 AM

Volume 226 • Issue 1 • January 2024 • hardwareretailing.com

Serving Hardware, Home Center & Building Material Retailers

Published by the North American Hardware and Paint Association

2024

Market Measure Reflections on Weather, Inflation and Price-Conscious Consumers Page 22

NEW

Experts Talk Strategy, Innovation & More Page 8

Constructing an LBM Strategy for Growth Page 38

Since bringing Midwest Fastener online I’ve been able to expand into more metric and automotive items that are critical to my market.

Being able to say, “Yes we have that” means we become the customer’s first choice. The consistent support and delivery with a larger product selection from Midwest Fastener makes us our customer’s first choice.

“I can’t believe you had it!” By expanding our set with Midwest Fastener, we surprise customers every day.

- Gary Dickes - Owner Ace Hardware Kenosha, WI

Exceeding Expectations. One Fastener Destination at a Time!

For your very own fastener destination, contact Glen @ 800-444-7313 x 120

800.444.7313

fastenerconnection.com

CONNECTIONS

Follow Us Online HEADQUARTERS COMING IN FEBRUARY

EXECUTIVE STAFF PRESIDENT & CEO Bob Cutter CHIEF OPERATING OFFICER & PUBLISHER Dan Tratensek CHIEF FINANCIAL OFFICER & EXECUTIVE VICE PRESIDENT, BUSINESS SERVICES David Gowan EXECUTIVE DIRECTOR, ADVANCED RETAIL EDUCATION PROGRAMS Scott Wright, swright@YourNHPA.org

1025 East 54th St. Indianapolis, Indiana 317-275-9400 NHPA@YourNHPA.org YourNHPA.org

EXECUTIVE DIRECTOR, INNOVATION & ENGAGEMENT Whitney Mancuso

COMMUNICATIONS

317-275-9400, editorial@YourNHPA.org

OUR MISSION

The North American Hardware and Paint Association (NHPA) helps independent home improvement and paint and decorating retailers, regardless of affiliations, become better and more profitable retailers.

NHPA BOARD OF DIRECTORS CHAIRMAN OF THE BOARD Ned Green, Weiders Paint & Hardware, Rochester, New York EXECUTIVE VICE CHAIRMAN Scott Jerousek, Farm and Home Hardware, Wellington, Ohio DIRECTORS Alesia Anderson, Handy Ace Hardware, Tucker, Georgia Jay Donnelly, Flanagan Paint & Supply, Ellisville, Missouri Ash Ebbo, Clement’s Paint, Austin, Texas Joanne Lawrie, Annapolis Home Hardware Building Centre, Annapolis Royal, Nova Scotia

Retail theft has become an increasingly significant concern for independent retailers. In the February issue of Hardware Retailing, we’ll look at what’s driving the new wave of retail crime and then offer practical ways to address retail loss in your own operation.

Hardware Retailing (ISSN0889-2989) is published monthly by the North American Hardware and Paint Association, 1025 East 54th St., Indianapolis, IN 46220. Subscription rates: Hardware Retailing (Payable in advance): U.S. & possessions $50/year. Canada $75/year. All other countries $110/year.

Single copy $7. The Annual Report issue can be purchased for $30.

Michelle Meny, Meny’s True Value, Jasper, Indiana

Periodical postage paid at Indianapolis, Indiana, and additional mailing offices.

SECRETARY-TREASURER Bob Cutter, NHPA President and CEO

POSTMASTER: Send address changes to Hardware Retailing, P.O. Box 16709, St. Louis, MO 63105-1209.

STATE & REGIONAL ASSOCIATIONS

All editorial contents © 2023 North American Hardware and Paint Association. No editorial may be reproduced without prior permission of the publisher.

MIDWEST HARDWARE ASSOCIATION Jody Kohl, 201 Frontenac Ave., P.O. Box 8033 Stevens Point, WI 54481-8033 800-888-1817; Fax: 715-341-4080

NHPA CANADA NHPA CANADA Michael McLarney, +1 416-489-3396, mike@hardlines.ca 330 Bay Street, Suite 1400 Toronto, ON, Canada M5H 2S8

CIRCULATION, SUBSCRIPTION & LIST RENTAL INQUIRIES CIRCULATION DIRECTOR Richard Jarrett, 314-432-7511, Fax: 314-432-7665

2

Loss Prevention Strategies That Work

HARDWARE RETAILING | January 2024

REPRINTS: For price quotations, contact the Editorial Department at editorial@YourNHPA.org. Printed in the U.S.

RESEARCH & CONTENT STRATEGY MANAGER Melanie Moul, mmoul@YourNHPA.org PRODUCTION MANAGER Austin Vance SPECIAL PROJECTS MANAGER Julie Leinwand SENIOR EDITOR Lindsey Thompson, lthompson@YourNHPA.org CONTENT COORDINATOR Jacob Musselman, jmusselman@YourNHPA.org GRAPHIC DESIGNER Autumn Ricketts GRAPHIC DESIGNER Olivia Shroyer SALES & PRODUCTION ASSISTANT Freda Creech PRODUCTION & DESIGN ASSISTANT Samantha Mitchell MARKETING COORDINATOR Nathan Piper

SALES NORTHERN REGIONAL SALES DIRECTOR Karen Hopkinson khopkinson@YourNHPA.org | 419-345-3306 SOUTHERN REGIONAL SALES DIRECTOR Faith Zucker fzucker@YourNHPA.org | 216-316-8203

ASSOCIATION PROGRAMS

800-772-4424, NHPA@YourNHPA.org DIRECTOR OF MEMBER SERVICES & EVENTS Katie McHone-Jones, kmchone-jones@YourNHPA.org DIRECTOR OF ORGANIZATIONAL DEVELOPMENT & CONSULTING Kim Peffley, kpeffley@YourNHPA.org TRAINING MANAGER & EDITOR Jesse Carleton, jcarleton@YourNHPA.org RETAIL ENGAGEMENT SPECIALIST Renee Changnon, rchangnon@YourNHPA.org

Volume 226 | Issue 1 | January 2024 CONTENTS

22

COVER STORY

Your Annual Report

04 EDITORIALLY SPEAKING 06 TAKING CARE OF BUSINESS

With insights from industry experts and data highlighting the performance and projections for the home improvement channel, the North American Hardware and Paint Association has assembled your key resource for 2024.

14

TRENDS

16

NEW PRODUCTS

42 NEWSMAKERS 44 CALENDAR 46 LAST WORD

24

MARKET MEASURE

Industry Breakdown

INDUSTRY VOICES

Get the data on industry performance and see projections for industry sales from NHPA and HIRI.

08 BUSINESS STRATEGY Setting Goals Gary Pittsford

09 RETAIL OPERATIONS Merchandising Fundamentals Tony Corsberg

10

RETAIL INNOVATION Eliminating Obstacles to Employment Gina Schaefer

11 26

MARKET MEASURE

28

Starting Simple Jim Carpenter

MARKET MEASURE

Chain Results & Financial Profiles

The Industry’s Benchmarking Tool

Reference big-box performance highlights and market share profiles of the industry’s leading chains all in one place.

See highlights from the 2023 Cost of Doing Business Study and how to use the data in it to benchmark your business this year.

12

MARKET MEASURE

32

MARKET MEASURE

HIRI Analysis

Industry Insights

Gain perspective with insights and projections from the Home Improvement Research Institute.

Hear from wholesaler executives on how the industry has changed and how they are supporting independent retailers in 2024.

ASK KIM We’re Stronger Together Kim Peffley

38 30

MARKETING MINUTE

CATEGORY SPOTLIGHT

Stay Light on Your Feet See how one retailer built a better lumber and building materials department in his store by identifying a shift in his customers’ needs and pivoting to meet those needs with the right products.

January 2024 | HARDWARE RETAILING

3

CONNECTIONS

Send Melanie a Message EDITORIALLY SPEAKING

mmoul@YourNHPA.org Melanie Moul

FROM THE EDITOR

The Strength of Many

“It’s always a privilege to be able to lead this report from concept to completion.”

T H E R E A R E T H O S E P R O J E C T S that come around once a year, and no matter how much you prepare or how often you’ve done them, they still somehow catch you off-guard.

Whether it’s compiling the many components or determining the logistics for launch, it takes a little extra focus and all hands on deck to get it out the door. Our annual Market Measure Report is one of those projects for me.

I first supported the development of the project about six years ago, and I was tasked with just one segment. Over the years, as I have become more familiar with the industry and grown into more responsibility here at the North American Hardware and Paint Association (NHPA), it became my project. That doesn’t mean I’m going it alone. Certainly, I couldn’t do this project without the support of our talented design team and the insights and data configurations provided by internal and external experts.

Despite it’s complexity, it’s always a privilege to be able to lead this project from concept to completion. It generally comes together the same way every year. But we’re always assessing it, considering how we can improve it for the next edition, knowing it’s an evergreen resource that people throughout the industry will reference for the rest of the year.

This year’s report starts on Page 22, and it features our organizational insights and projections for the year ahead, alongside data we’ve collected from various industry and government sources. We also appreciate the contributions from our wholesaler partners who reflect on 2023 and share their goals for 2024.

What we hope you recognize in this report is that it is truly a comprehensive guide that has insights and data from throughout the channel for you to reference as you plan your own big-picture projects.

The report published in these pages is tailored to the Hardware Retailing audience. I encourage you to visit YourNHPA.org/market-measure to download the complete NHPA report. There you can also review insights into the paint channel and listen to two podcasts featuring NHPA’s Dan Tratensek and Dave King from HIRI. Thanks to everyone who helps make this report possible every year, and thanks to you, the readers, who are the reason we develop it.

Melanie Moul Research & Content Strategy Manager

4

HARDWARE RETAILING | January 2024

Jan. 25-27

2024

See more event details!

For more information, contact us today!

Pat McCutcheon, VP of Sales: 1-800-333-0520 | marketing@househasson.com House-Hasson Hardware Company: Knoxville, TN | www.househasson.com

CONNECTIONS

Send Dan a Message TAKING CARE OF BUSINESS

dant@YourNHPA.org Dan Tratensek

F R O M T H E PU B L I S H E R

Here When You Need Us

“The more we can put down our flags and the more voices we can bring to the discussion to share and learn with one another, the better off we all are.”

I ’ V E B E E N E M P L O Y E D A T N H P A for nearly 30 years. Wow, right?

During these nearly three decades, I’ve seen both the organization and my role within it go through a lot of changes.

When someone used to ask me what I did for a living, the answer was pretty simple: I’m an editor of a business magazine. Most people understood this job and there wasn’t a lot of follow-up explanation required.

Now, when someone asks me what I do, the answer is a bit more complicated.

Today, rather than throwing out my title, I typically say something like, “I attend meetings.”

I don’t know if it is just my vocation that has gotten more complicated or if it’s actually everything we all do. There just might not be a “simple” explanation for anyone’s job anymore.

One thing that hasn’t changed in the time I’ve been with NRHA (now NHPA) is the way we describe our position in the industry.

We typically tell everyone we are like the Switzerland of the home improvement channel—a place that doesn’t take sides and where everyone is welcome and everyone in the channel can have a voice.

Last year, with the launch of our Independents Conference, we wanted to exemplify this principle to the industry. We wanted to create an event where everyone could come together under one tent in support of the independent retail channel. It’s also why we ardently support other industry events like the National Hardware Show.

The more we can put down our flags and the more voices we can bring to the discussion to share and learn with one another, the better off we all are.

It’s in that spirit that you are going to notice some changes in the coming months both in this magazine and from your association.

We are doubling down on our commitment to serve as the industry’s village square. Part of this will mean bringing additional viewpoints and voices to the table to share their experience through the pages of this magazine and in our other media properties.

Additionally, we will continue to engage with our industry partners who support independent retailers by supporting them. We will continue collaborating with organizations like the National Hardware Show to find ways to help make their events even more meaningful to the channel. And lastly, we will challenge ourselves to cultivate new partnerships with anyone and everyone who supports our mission of helping independent retailers run better and more profitable operations.

So with this commitment, I wish you all a Happy New Year! Now let’s go out there and prove we are stronger together!

Dan M. Tratensek Chief Operating Officer & Publisher

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HARDWARE RETAILING | January 2024

All-Inclusive PROMOTION PROGRAM Email Marketing

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Let’s get creative!

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In-Store Signage Kits Kit themes to match your circulars and sales, along with demographic mapping reports.

Available for special events.

Social Media Starters Receive emails about premade content, posting suggestions, and weekend project ideas. Also, if you need help creating business accounts, please reach out to us.

Be sure to ask about our

New Movers Program!

For more information, contact us today!

Kim Gibbs, Marketing Manager: 1-800-333-0520 | marketing@househasson.com House-Hasson Hardware Company: Knoxville, TN | www.househasson.com

OPERATIONS

Get Your Valuation BUSINESS STRATEGY

Access business valuation services and explore businesses for sale on the NHPA Retail Marketplace at YourNHPA.org/marketplace.

E XP E R T I N S I G H T S

Make Changes in the New Year

I

’ve watched the retail hardware and lumber industry mature over the last 50 years. The industry is now stronger, more high-tech and doing better financially. A high percentage of retail hardware stores, lumberyards and paint stores are doing very well, but there’s always room for improvement. Below are a few ideas to consider in the new year.

Make it a goal this year to spend at least two or three hours per month working on the business rather than in the business. Hire a reputable business valuation firm familiar with your industry to prepare a business valuation to understand the current value of your business and determine what areas need improvement.

When I look at a company’s business valuation and financial statements, there are certain areas I concentrate on. For example, what’s the gross margin on products being sold? The national average is about 40%*. If your gross margin is less than 40%, do what you can to improve it. Review and collect on old accounts receivable. Is your payroll in line? That’s usually the biggest expense. The national average for payroll, including all salaries, is around 20%*. If you’re off target, make adjustments.

As your gross margins go up and your expenses come down (or flatten out), that means more free cash flow, which means increased business value. This is an important area of focus if you plan to transition the company in the next few years. It doesn’t matter who the buyer is—the buyer needs the highest cash flow you can produce.

Picking your exit planning team is essential in the last three to five years before you transition the business. Meet with them at least once or twice a year to be sure your exit plan is on track. The three members essential to your team are a corporate attorney, an accounting firm familiar with all your taxes and a business financial adviser.

If your children are going to be taking over, in those last three to five years make sure you take them with you to every meeting you have with your banker, your attorney, your accountant and each of your vendors.

A high percentage of owners in this industry are baby boomers between the ages of 60 and 80, and over the next five to 10 years, most of them will be transferring their business. A strong, high-profit financial statement makes these transitions easier for everyone.

Meet Gary Gary Pittsford has helped hundreds of family business owners with valuations, exit planning, estate documents, retirement income security and net worth protection.

Gary served as president and CEO of Castle Wealth Advisors, which was acquired in 2021 by Creative Planning to form a new division providing services for corporations, LLCs, family limited partnerships and others across a range of industries. Creative Planning Business Services offers expanded services for business owners. Gary retired from Creative Planning in December 2023 and now functions as a consultant, continuing to work with business owners nationwide.

CONNECT gary@castleconsultingco.com

Gary Pittsford

Partner & Chief Valuation Officer (ret.) and Consultant Creative Planning Business Services *Source: 2023 NHPA Cost of Doing Business Study This commentary is provided for general information purposes only, should not be construed as investment, tax or legal advice and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.

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HARDWARE RETAILING | January 2024

TRAINING

Build Your Merchandising Foundation RETAIL OPERATIONS

Registration for the 2024 Foundations of Merchandising Management Live! is now open at YourNHPA.org/foundationslive.

E XPE R T I N S I G H T S

It’s Time to Invest in Merchandising Fundamentals

W

hen NHPA asked me to contribute to the pages of Hardware Retailing, I was honored. For the past couple of years, I have worked closely with the association to develop and launch the new Foundations of Merchandising Management course that you may have heard about or perhaps attended. This new program will once again be presented in Las Vegas at the National Hardware Show in March. It’s also available online as part of NHPA’s advanced education curriculum.

The Foundations of Merchandising Management course is based my 45 years of merchandising experience in the independent home improvement channel. During my career with Friedman’s Home Improvement, which operates four dual-path stores in northern California, I was successful in spearheading a major rebranding initiative, implementing new merchandising strategies that included assortment planning for consumers and pros, creating visual merchandising standards, promotional planning, store design and other initiatives that enabled us to effectively compete and grow alongside the industry big-box retailers since they entered our market years ago. I am also a founding member of NHPA’s Marketing and Merchandising Roundtable, where during the past 12 years I have learned and shared many merchandising management best practices with my fellow retailers.

When I retired from Friedman’s as vice president of merchandising a few years ago, and with encouragement from people in this industry, I began helping other independent retailers with their merchandising management initiatives. This work inspired me to create Merchant5 Advisors. As the name suggests, Merchant5 is an advocate of the five principles (5 Ps) of merchandising. We help retailers craft their unique 5 P Recipe so they can deliver their own unique brand that differentiates them from the competition.

Effective and successful merchandising management requires a lot more than just placing products on a shelf in a cool way. Merchandising is more comprehensive and requires both purpose and intent. It’s this type of purposeful and intentional merchandising that increases sales, optimizes the performance of your inventory and improves the retail space and overall customer experience. It’s understanding the “what, why and how” of all the merchandising disciplines that will make a difference at checkout and in the minds of your customers.

As the industry adjusts from the fallout of COVID’s supply chain challenges the past few years, the timing for evaluating your merchandising execution should already be happening. It’s time to course-correct, clean up and rebuild these merchandising disciplines that will enable you to grow and prosper for the business that lies ahead.

Meet Tony Tony Corsberg’s nearly 45-year career began as a stocker at Friedman Bros.

Hardware in Santa Rosa, California. He eventually served as vice president of merchandising, where he spearheaded the rebranding initiative that created Friedman’s Home Improvement, which today operates four large-format home centers with lumberyards in northern California. Tony retired from Friedman’s in 2018 and later started his consulting firm Merchant5 Advisors, guiding independent retailers in merchandising initiatives.

In 2022, he was integral in the development of NHPA’s Foundations of Merchandising Management program.

CONNECT Email tonycorsberg@gmail.com Merchant5.com

Tony Corsberg

Principle Merchant5 Advisors

January 2024 | HARDWARE RETAILING

9

RESOURCES

Supporting Small RETAIL INNOVATION

Learn more about the organizations helping small business succeed and how you can join the efforts at hardwareretailing.com/small-business-rising.

R E TA I L E R I N S I G H T S

There Is Power in Community

T

he new year always brings with it a time to reflect—to look back on accomplishments and plan for the year ahead. Each year, I try to build on my previous goals and milestones even though sometimes I think I’ve hit the jackpot already.

Recovery Hardware. In 2016 a dear teammate of mine told me that was the name the community had begun calling our first hardware store in Washington, D.C. It’s true we had spent the previous 13 years hiring returning citizens and folks from the recovery community, almost on accident. In our efforts to build a strong corporate culture, we consciously eliminated the obstacles to employment, which included removing the felony box from our application and overlooking gaps in work history.

Our first teammate had been imprisoned for 17 years and our second was battling an addiction to crystal meth. Both of those things create incredible long-term challenges—obstacles to employment, access to healthcare programs and the ability to be trusted by people who perceive them differently. I didn’t know at the time that recovery rates hover around 5%, and 85% of those rearrested are unemployed. But I did know that people want a purpose—a place to belong where they feel seen. And a good job can provide those things.

As the business founder, the nickname meant even more to me than our hiring practices. Our first location opened in a neighborhood that had been destroyed by riots in 1968. For decades, Logan Circle sat dormant, overlooked and unloved until people started moving east in Washington, hoping for more affordable housing.

When we opened, surrounded by boarded up houses and storefronts, we became part of the recovery efforts of the beautiful community I came to call home.

I was also in a recovery of sorts. Having been laid off from three tech companies in the previous two years, I was ready to craft a new life for myself and forging a path in Logan Circle seemed like just the ticket.

As it turns out, Recovery Hardware was the perfect nickname for our burgeoning business. It eventually became the title of my book published in 2022 that chronicles the challenges of running a hardware business, the beauty of community and the recovery that we can create as small business owners in this country.

I know so many of you can relate.

Dream big in 2024.

Gina Schaefer

Founder and Former CEO A Few Cool Hardware Stores

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HARDWARE RETAILING | January 2024

Meet Gina Gina Schaefer is the founder and former CEO of over a dozen hardware stores in the Washington, D.C. area. Gina’s big passion is developing urban markets, supporting small businesses and helping women succeed in all aspects of the hardware industry. She has tirelessly focused on the “Return to Main Street” movement in Washington, D.C. to promote Shop Local campaigns and community revitalization in urban areas.

CONNECT Email gina@acehardwaredc.com LinkedIn Gina Schaefer Scan the QR code to learn more about Gina’s work to promote small businesses and second chances.

RESOURCES

Hard-Working Marketing MARKETING MINUTE

Discover marketing insights and resources to get the word out about your operation at YourNHPA.org/marketing-guides.

R E TA I L E R I N S I G H T S

Focus on a Solid Foundation

W

hen it comes to retail LBM marketing, I find myself being able to think and talk about it for hours. As the son of a builder, my first job at 15 was at our local True Value hardware store where I began my working life stocking shelves, cutting keys and mixing paint. The foundations established in that environment prepared me for—and continues to challenge me—in my role as the director of marketing for Curtis Lumber.

Retail marketing has evolved from its predecessors of advertising, merchandising and communications, and nonmarketers often describe it as something complicated and mystical. I believe this is a little by design. Companies that sell marketing solutions want to make it more complicated than it really is, plus you have the constant bombardment of new tactics, new social media networks and new things to learn.

Peers in the industry, other business leaders and friends with a side hustle often ask me what I think they should do to be better at marketing.

The answer is rarely any of these new and complicated techniques. Most people are so busy with running the day-to-day business that some of the marketing basics get missed, and without a dedicated team, they can go for years without being addressed.

The answer is to keep it simple. Start by doing a Google search of your company name. Do the results have the correct hours and phone numbers? Search your store’s top category and town—like “paint store Tucson”—and see what you find. If you are unhappy with the results, you can find companies that provide local listings management and can help with correcting this foundation. Think of your online presence as the phone book and storefront of the digital age; without the proper information, people will just scroll to the next company or number.

Do you have a contact form on your website? Where does it go? Are you sure you’re getting the information? So many times we test, test and test again, only to find out that the form goes nowhere. It’s gotten harder than ever to gather customer information and quote requests, and the worst thing that can happen is a customer sends a message and you never answer them because you didn’t get their message, all while the customer is waiting for a response.

It’s so easy to assume that our information is correct, the website is working properly and the people getting the leads are following up. However, the old adage of what is inspected is respected holds true here. It never hurts to act like a customer and remember that just one missed phone call or email could equal thousands of dollars in lost sales.

The trick to being better at marketing and moving to the next level starts with a solid foundation. There is no sense in generating leads or phone calls to numbers that do not work and quote requests to email addresses that go nowhere. Focus on the basics and then build from there.

Meet Jim Jim Carpenter serves as the director of marketing for Curtis Lumber, a family-owned business that has been operating since 1890. Over the past 18 years, he has been instrumental in implementing various marketing strategies that have helped the company grow and expand to encompass 23 locations across northern New York and Vermont and exceed over $300 million in annual sales. Jim is committed to finding new and innovative ways to reach customers and improve the overall customer experience at Curtis Lumber.

CONNECT Email jim.carpenter@curtislumber.com LinkedIn Jim Carpenter

Jim Carpenter

Director of Marketing Curtis Lumber

January 2024 | HARDWARE RETAILING

11

INDUSTRY EVENTS

Meet Up With Familiar Faces ASK KIM

Networking, education and more await at industry events this year. See the list of dates at YourNHPA.org/cal.

E XPE R T I N S I G H T S

Collaborative Problem-Solving

A

nyone who knows me knows I am passionate about the independent home improvement industry. It’s evident from the fact that every vacation or trip I take inevitably involves visiting a hardware, lumber, home center or paint store. Fortunately, my husband shares this fascination, particularly for custom-designed 5-gallon buckets, making these excursions an adventure we both enjoy. I know I am not alone in my vacation store visits—can you relate?

When I joined the association as a consultant, one of my main goals was to expand the sharing of best practices throughout the entire industry. Each store I visited showcased something remarkable, alongside some growth opportunities.

Over my three decades in the industry, I’ve come to realize that there’s hardly a problem without a solution—someone out there has likely already figured it out.

As we begin this new year, I’m committed to supporting the industry by introducing a column where you can freely ask any questions you’re grappling with or simply seek more insights. Drawing from my own personal experiences and the extensive knowledge available within the industry, I’m dedicated to bridging the gap between the challenges we face and the abundant solutions within our reach.

A recurring concern from the retailers I consult with is, “Shouldn’t I already know how to do this?” My unequivocal response to this is always a resounding, “No.” It’s perfectly natural not to have all the answers—we’re all constantly learning and evolving.

What truly matters is recognizing that it’s absolutely acceptable to seek guidance, advice or feedback. There should be no shame in reaching out, whether it’s to someone within your network or someone entirely new. I’m passionate about dispelling the stigma associated with uncertainty. It’s highly likely that you’ve conquered a problem that someone else is currently grappling with, and in turn, they might hold the key to solving your own predicament. I know that I am learning something new every day.

So, I’m eager to hear about the challenges you’re navigating or the aspirations you’re pursuing but haven’t quite mapped out yet. No question is too big or too small. If you’re wondering about something, chances are others are too. Asking your question will not only help you but also help others within this industry we love.

Please feel free to submit any questions you may have to AskKim@YourNHPA.org, or scan the QR code at the bottom of this page, and we will begin sharing those questions and creative industry solutions with you throughout the year. I look forward to working together to bridge the gap to support the independent channel.

Remember, we are stronger together.

Kim Peffley

Director of Organizational Development & Consulting North American Hardware and Paint Association

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HARDWARE RETAILING | January 2024

Meet Kim Kim Peffley is the director of organizational development and consulting with the North American Hardware and Paint Association (NHPA).

With nearly 30 years of retail experience, her management and leadership knowledge enables her to offer professional training covering many aspects related to effectively leading a team in a home improvement retailing environment.

Peffley leads retailers through comprehensive organizational change to improve internal communications and create stronger teams.

CONNECT Email kpeffley@YourNHPA.org LinkedIn Kim Peffley To submit a question to Kim, scan the QR code below

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Supported.

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A Powerfully Simple Point of Sale Solution.

Call 800.725.2346 or learn more at paladinpointofsale.com

RESEARCH

Read the Full Report TRENDS

Explore more highlights from the 2023 Bentley-Gallup Business in Society Report at hardwareretailing.com/society-report.

Making a Difference

What’s Your Societal Impact?

1

55%

2x

as many Americans say small businesses have a positive impact compared to large businesses

of Americans would change jobs for a company that they feel “makes a greater positive impact on society”

2

1 in 4 would

You have an advantage as a small business operator as 85% of Americans say that small businesses have a positive impact on people’s lives

change jobs even with a 10% pay cut

WHAT

71% of workers ages 18 to 29 would make this change

T H E

People Want 3 DATA P O I N T S A B O U T WH AT EMPLOYEES LOOK FOR IN A JOB A T T R A C T I N G W I L L I N G A N D E N G A G E D E M P L O Y E E S is still a top priority —and for some, a concern—coming into the new year. In a recent study of nearly 5,500 U.S. adults, Gallup and Bentley University sought to identify current priorities for employees and what prompts people to change jobs. See some highlights here and consider how you can ensure your operation meets your team’s expectations of a supportive workplace.

3

“Successful businesses need to be responsive to their customers and their communities.”

—E. LaBrent Chrite

President, Bentley University

Source: 2023 Bentley-Gallup Business in Society Report

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HARDWARE RETAILING | January 2024

Job-Seeker Priorities Fair wages

High-quality health care benefits

Enjoyable workplace culture

95% of respondents rate having a “workplace culture that I like” as important, tied with high-quality health care benefits and just one percentage point below fair wages

PRODUCTS

Retailer Recommendations NEW PRODUCTS

Send a note to editorial@YourNHPA.org about products you can’t keep on the shelf. Include your name, your business name and reasons why you love it.

Showerhead Moen’s Verso™ Showers with Infiniti™ Dial provide unlimited spray and coverage options and are available in both square and round showerhead options. Users can select a custom shower with seemingly endless spray and coverage choices, and the handheld showerhead includes four pre-set spray settings: silk, massage, downpour and wide coverage. Verso Showers are available as a hand shower, rainshower or as a combination showerhead that offers both a rainshower and hand shower.

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Pet Hair Remover The FurZapper is a safe, reusable and effective pet hair remover that goes into your washer and dryer and gently removes pet hair from your clothing. Just place the FurZapper into your clothes washer during any washing cycle, and it goes to work gently removing any pet hair and lint. While effective in the washer, it works even better in the dryer, often filling up your lint trap.

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MAYHEW STEEL PRODUCTS INC. mayhew.com or 800-872-0037

16

HARDWARE RETAILING | January 2024

Oscillating Multi-Tool The Bosch18V Brushless StarlockPlus® Oscillating Multi-Tool features upgraded user handling, increased cutting performance and an outstanding blade grip. The redesigned handle rotated the battery position by 90 degrees, helping to make handling more convenient with less interference when flush cutting. Vibration Control reduces vibration up to 80% compared to the previous generation of the Bosch 18V oscillating multi-tool.

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BENJAMIN MOORE & CO. benjaminmoore.com

January 2024 | HARDWARE RETAILING

17

NEW PRODUCTS

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HARDWARE RETAILING | January 2024

Porch Swing The Centerville Amish Heavy Duty Rollback Swing has been a bestseller for over a decade due to its timeless design and durability.

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January 2024 | HARDWARE RETAILING

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NEW PRODUCTS

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20

HARDWARE RETAILING | January 2024

Mobile Workshop The MULE 5-in-1 Mobile Workshop is the ultimate project cart for DIYers and professionals. With a powerful, 3-speed adjustable fan, bright LED light, power strip with a 10-foot cord, loading tray to haul materials and tool caddy to store small tools, the Mobile Workshop reduces clutter in any workspace and adds convenience to any job.

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January 2024 | HARDWARE RETAILING

21

2024

THE INDUSTRY’S ANNUAL REPORT

W

hile few might call what the home improvement industry experienced during the pandemic a party, 2023 had all the feelings of a day-after hangover as businesses struggled to find their footing and were left dealing with the aftermath of three years of outsized growth.

It’s not fair to blame the industry’s woes in 2023 solely on the explosion in business experienced during the pandemic or the subsequent supply chain issues. Rather, three factors provided the major headwinds that seemed to stall growth throughout the year: Weather, deflation and slowing sales on big-ticket items.

Before we dive into the causes, however, let’s take a look at the numbers.

While the U.S. Census Bureau was tracking industry sales down about 2.8% through the first three-quarters of the year, NHPA’s prediction was that the year would finish down about 3.8%. This would put overall industry sales in 2023 at approximately $544.6 billion

and would mark the first year-over-year decline in sales the industry has experienced since 2008-2009* when sales dropped nearly 10%.

Now, it is important to point out that this backslide comes on the heels of three straight years of extremely strong growth that averaged about 10% a year—significantly higher than the 3% or so that the industry would average in a typical year. So, while the industry undoubtedly stumbled a bit in 2023, it was from a much higher platform than it had ever seen.

In fact, there were many in the industry that predicted a “reckoning” was due in 2022 and yet the industry still charged forward.

HeadWinds

As pandemic spending cooled and supply chains began to normalize, the previously mentioned challenges proved too much for the industry to overcome in 2023.

Among all the difficulties faced throughout 2023, weather may have been the most vexing. In a typical year, the home improvement industry will always face

*Source: 2011 Market Measure Report, North American Retail Hardware Association

22

HARDWARE RETAILING | January 2024

PODCAST

Listen to the Experts Our friends at the Home Improvement Research Institute offer their insights into expectations for 2024. Listen to Episode 99 at YourNHPA.org/pod.

its share of weather-related issues.

In most cases, these impacts are typically felt regionally, and any negative weather trends tend to be offset by positive weather cycles later in the year.

This simply wasn’t the case in 2023. Were it not so trite to say it, you might label 2023 as “the perfect storm” of weather challenges for home improvement. Too mild a winter, too wet of a spring, too hot of a summer all seemed to play out this year, all of which postponed homeowner projects that simply never came to pass.

When you add to the weather woes the fact that many homeowners also curtailed spending on big-ticket items for the home, it’s easy to see why industry sales slipped. One retailer summed up consumer attitudes toward spending rather succinctly early in the year when he said, “Everyone bought that fancy grill or patio furniture over the last two years. They just aren’t going to rush out and buy new ones now.”

Consumers also, as expected, began spending money on other discretionary pursuits such as travel (which saw record highs during the year), concerts and dining out. And inflation had them spending more on essentials like fuel, food, vehicles and more.

Lastly, while inflation was being felt across many areas of the economy, in 2023, it was pricing deflation among building materials products that also contributed to overall lower sales versus 2022.

Looking AheAd

Most economists are still looking at 2024 with caution. Some are even

predicting a brief and somewhat gentle recession to occur toward the middle of the year.

Whether an actual recession is in the cards remains to be seen.

However, NHPA is predicting that home improvement will still struggle against some of the challenges that dampened growth this year.

In fact, NHPA is forecasting relatively flat sales for the industry in 2024 with an anticipated growth of only about 0.9%. This projection is closely aligned with the predictions of other organizations like the Home Improvement Research Institute (see Page 30 for their analysis), which predicted growth for the industry of about 0.8% in its latest size-of-market report.

Over the next five-year period, NHPA is also dialing back its growth predictions for the industry, anticipating a slower slog back to the typical growth rates we see in this industry. NHPA’s latest estimates put the five-year compound annual growth rate for the industry at just 1.3%. This is somewhat more conservative than HIRI’s five-year outlook, which pegs growth at about 1.9%.

Another factor worth noting as we look toward the next five years is a continued decline in the number of store units across the industry. While consolidation continues to offer a solution for many independent retailers looking to exit the industry as they head into retirement, NHPA feels that store counts will continue to decline as independent owners age out of their businesses.

What We’ll Cover 24

Industry Breakdown

26

Chain Results

27

Financial Profiles

28

Cost of Doing Business Study

30

HIRI Analysis

31

Independent Retailer Index

32

Industry Insights

37

Canadian Retailer Report

This Market Measure report is compiled by NHPA staff from a variety of sources that are attributed throughout.

January 2024 | HARDWARE RETAILING

23

INDUSTRY BREAKDOWN

2023

2022-2027

2022-2027

Home Improvement Sales by Month

Sales by Store Type

Outlets

(in billions)

(in billions)

January

$35.4

February

$34.3

March

$42.2

April

$43.6

May

$50.9

June

$46.7

July

$42.2

August

$44.3

September

$40.3

YTD

$379.9

2022

Hardware Stores

$66.2

Hardware Stores

18,100

Home Centers

$354.8

Home Centers

9,600

Lumberyards

$145.1

Lumberyards

9,520

TOTAL

2023

Hardware Stores

Home Centers

$338.2

Home Centers

9,540

Lumberyards

$137.8

Lumberyards

9,470

January

4.1%

February

1.6%

March

-5.9%

April

-6.3%

May

0.8%

June

-3.8%

July

-3.9%

August

-2.8%

17,700

Home Centers

$341.6

Home Centers

9,495

Lumberyards

$141.1

Lumberyards

9,450

September YTD

-2.8%

Source: U.S. Department of Census/ Monthly Retail Sales Report NAICS 444/NSA

24

Annual

-6.4%

Growth Rate 2022-2027

TOTAL

$549.2

36,645

Hardware Stores

17,500

Home Centers

$355.1

Home Centers

9,440

Lumberyards

$146.2

Lumberyards

9,375

2025

TOTAL

$569.0

36,315

Hardware Stores

$68.5

Hardware Stores

17,200

Home Centers

$368.3

Home Centers

9,400

Lumberyards

$148.7

Lumberyards

9,350

2026

TOTAL

$585.5

35,950

Hardware Stores

$69.3

Hardware Stores

16,985

Home Centers

$379.0

Home Centers

9,200

Lumberyards

$154.2

Lumberyards

9,100

0.92%

Home Centers

1.30%

Lumberyards

TOTAL

2027

TOTAL

$602.5

Hardware Stores

Source: NHPA calculations

HARDWARE RETAILING | January 2024

2024

$67.7

TOTAL

Compound

36,860

Hardware Stores

TOTAL

2027

TOTAL

$544.6 $66.5

TOTAL

2026

2023

17,850

Hardware Stores

Hardware Stores

2025

37,220

$68.6

TOTAL

Sales Growth 2022 vs. 2023

TOTAL

$566.1

Hardware Stores

TOTAL

2024

2022

1.20%

1.30%

Percent Change 20222027

35,285

Hardware Stores

-6.2%

Home Centers

-4.2%

Lumberyards

-4.4%

TOTAL

-5.2%

LEGEND

Sales

U.S. Home Improvement Industry Sales

YOY Growth

North American Hardware and Paint Association Projections

Compound Annual Growth 2022-2027 = 1.3%

700

IN USD BILLIONS

600 500

$566.1

$544.6

$549.2

400

5.9%

-3.8%

0.9%

2022

2023

2024

$569.0

$585.5

$602.5

3.6%

2.9%

2.9%

2025

2026

300 200 100 0 2027

Home Improvement Product Sales Performance Home Improvement Research Institute/IHS Projections at Current Prices

Compound Annual Growth 2022-2027 = 1.97%

700

IN USD BILLIONS

600 500

$561.4

400

5.1%

2022

$555.9

$577.7

$595.0

-1.8%

0.8%

3.9%

3.0%

2023

2024

2025

$551.2

$618.9 4.0%

300 200 100 0 2026

2027

Home Improvement Retail Sales U.S. Department of Census Monthly Retail Sales Report NAICS 444/NSA

600

Compound Annual Growth 2017-2022 = 7.1%

IN USD BILLIONS

500 400 300 200

$425.6 $365.7

$377.5

$384.5

4.7%

3.2%

1.9%

2017

2018

2019

10.7%

$477.8 12.3%

$514.5 7.7%

100 0 2020

2021

2022

January 2024 | HARDWARE RETAILING

25

C H A I N R E S U LT S

Top Chains: Individual Performance 2022 Sales (in billions)

Stores at End of FY2022

Stores in 2023 (as of Q3 2023)

Home Depot

$157.4

2,322

2,333‡

Lowe’s

$97.1

1,738^

1,746^

Menards Inc.

$13.4*

328*

—

Tractor Supply

$14.2

2,066

2,198#

Atlanta

Mooresville, North Carolina

Eau Claire, Wisconsin

Brentwood, Tennessee

Sources: Company reports and NHPA research ‡Store counts include operations in the U.S., Canada, Mexico and all other locations ^Store counts include U.S. operations; Lowe’s discontinued operations in Canada in February 2023 *Source: National Retail Federation Top 100 Retailers 2023 List # Tractor Supply Co. acquired 81 Orscheln Farm and Home stores in 2022

Market Share Profile Top Chains: Industry Share Sales

No. of Stores

(as % of total industry)

(as % of total industry)

2018

52.5%

18.0%

2019

51.3%

2020

Top Chains: Combined Performance Net Sales

(at the end of FY2022)

2018

$183.6

6,941

15.4%

2019

$208.5

6,983

50.7%

15.6%

2020

$252.6

7,043

2021

51.1%

18.0%

2021

$273.3

6,797

2022

49.8%

17.3%

2022

$282.1

6,454

Source: NHPA calculations Note: For the 2023 Market Measure Report, NHPA eliminated lumber chains from its data. As such, percentage point change and compound annual growth rate are not represented in this report.

26

No. of Stores

(in billions)

HARDWARE RETAILING | January 2024

FINANCIAL PROFILES

2022 Financial Profiles of Leading Publicly Held Chains Operating and Productivity Profile

Home Depot

Lowe’s

Number of Stores (at end of FY2022)

2,322

1,738

Distribution Centers

400+

100+*

104,000

112,000

Total Sales

$157.4 billion

$97.1 billion

Total Asset Investment

$76.4 billion

$43.7 billion

Total Inventory

$24.9 billion

$18.5 billion

Sales Per Square Foot

$627

$498

Inventory Turnover

4.2x

3.5x

Net Sales to Inventory

15.8x

19.1x

Total Sales Per Employee

$333,764

$316,287

Average Size of Transaction

$90.36

$103.64

Gross Margin Return on Inventory

211.9%

174.1%

Home Depot

Lowe’s

Net Sales

100%

100%

Cost of Goods Sold

66.5%

66.8%

Gross Margin

33.5%

33.2%

Total Operating Expenses

18.3%

22.8%

Net Income (Before Taxes)

14.3%

9.3%

Home Depot

Lowe’s

Total Current Assets

20.6%

22.1%

Cash

1.8%

1.4%

Receivables

2.1%

—

Inventory

15.8%

19.1%

Other

1.0%

1.2%

Fixed Assets

58.7%

56.2%

Total Assets

100%

100%

Current Liabilities

30.2%

44.6%

Long-Term Liabilities

67.7%

88.0%

Net Worth

2.1%

-32.6%

Total Liabilities and Net Worth

100%

100%

Average Size of Selling Area (sq. ft.)

Income Statement

Balance Sheet

Sources: Company annual reports Note: Lowe’s closed operations in Canada as of Feb. 3, 2023. Canadian operations accounted for approx. 5% of consolidated sales for the fiscal year * Lowe’s says it operates “more than 100 supply chain facilities”

January 2024 | HARDWARE RETAILING

27

RESEARCH

2024

Get Your Benchmarking Tool Today You can access the industry’s most comprehensive benchmarking tool at YourNHPA.org/codb and start 2024 off strong.

THE COST OF DOING BUSINESS ANNUAL BENCHMARKING STUDY

T

he 2023 Cost of Doing Business Study presents the North American Hardware and Paint Association’s (NHPA) annual financial and operational profile of independent hardware stores, home centers, lumber and building materials (LBM) outlets and paint and decorating outlets. This study assesses the financial performance of home improvement retailers who graciously submitted confidential financial reports for fiscal year 2022 to NHPA. The study presents composite income statements and balance sheets plus averages for key financial performance ratios.

Retailers can use this data to measure their own performance against industry averages. The data develops benchmarks retailers can use to establish financial plans to improve profitability.

Profit before taxes of 5.8% is at its lowest level in three years, but is still more than double pre-pandemic levels (5.8% vs 2.1%).

Much like the hardware stores, home centers seemed to be opportunity buying with the improvement of the supply chain. Inventory as a percentage of assets (50.7%) was the highest since 2014, but sales to inventory (4.0) and GMROI (136.6%) were the lowest since 2013. The inventory holding period of 137.6 days was the highest since 2013, meaning retailers are sitting on a plethora of inventory.

Another solid note was that while home centers increased staff by three employees, sales per employee ($365,599) and gross margin per employee ($124,304) were the highest levels since the study began.

Hardware Stores

Comparable store sales for the hardware segment were up 2.15% to an all-time record of $2,973,765 per store. Sales per customer also reached an all-time high of $33, which is a 37.5% increase over pre-pandemic sales. Transactions are down (1.4%), however, for the third year in a row, but remain higher (+3.2%) than pre-COVID levels.

Profit before taxes dropped from 9.1% (a record) in the prior year to 7.5% in 2022, but is still the third highest ever recorded.

While assets were at an all-time high of $1,556,422 per store, one concern is inventory levels. Inventory turnover of 1.9 and sales to inventory of 3.4 were at their lowest levels since 2015, and the inventory holding period of 188.4 days is at its highest level since that same year. Finally, inventory per square foot of $76 is the highest ever. Right sizing inventory should be a priority for retailers this year.

Home Centers

The segment most affected by a function of the data or by who chose to participate is home centers. Sales per store of $6.2 million, assets of $3.05 million and sales per customer of $75 were all the highest ever recorded. Comp sales were up 5.64% and just like the hardware segment, transactions are down for the third year in a row.

28

HARDWARE RETAILING | January 2024

Lumber and Building Material Outlets

For all the talk about lumber pricing fluctuation and slowdowns, LBM retailers delivered record profits of 8%.

Comp sales were up 9.88% in excess of 21% in each of the prior two years. While sales per store of $9.8 million was the third highest ever on record, sales per customer of $270 is at its lowest level since 2018 ($191). With the cost of goods sold of 71.5% being the lowest since 2015, gross margin after rebate of 29.8% was the highest since 2015.

LBM dealers have also apparently reinvested profits over the last several years, as depreciation of 1.5% contributed to the rise of other operating expenses being 7.4%, the highest since 2015. With a third strong year under their belt, LBM dealers are sitting on a record amount of cash (11.2%) and a record low amount of inventory (32.6%) as a percentage of assets.

Employee count increased by five, but sales per employee were down ($448,283), roughly the same as 2018. Even with more employees at high-profit operations (+19), sales per employee were $115,630 more. While gross margin per employee was down ($100,775), it is still better than pre-pandemic levels.

Hardware Stores Median Sales Per Customer Typical

Key Business Indicators

High-Profit

Typical

50%

$40

$38

42.4%

High-Profit

43.9%

40% $35

$33

$33 $30

$30

30%

$32 $29

$25

$24

$23

2018

2019

18.4% 13.4%

$24

$21

20.8%

20% 10% 0%

$20 2021

2020

2022

7.5%

Gross Margin After Rebate

Total Payroll

Profit Before Taxes

Home Centers Median Sales Per Customer Typical

Key Business Indicators

High-Profit

50%

$120

34.0% 34.0%

$91

30%

$80

$75

$69

20%

$68 $44

$40

High-Profit

40%

$100

$60

Typical

$40

$37

$49

$58

17.4%

15.1%

10%

9.2% 5.8%

$42

0%

$20 2018

2019

2020

2021

Gross Margin After Rebate

2022

Total Payroll

Profit Before Taxes

Lumber and Building Material Outlets Median Sales Per Customer Typical

Key Business Indicators

High-Profit

$850

50%

$782

$700

$652

$550

$311

$100

29.8% 30.9%

20%

$400 $250

High-Profit

40% 30%

$512

Typical

$112

2018

12.4% 12.2%

$259 $211

$191

$270

10%

11.6% 8.0%

$213

0% 2019

2020

2021

2022

Gross Margin After Rebate

Total Payroll

Profit Before Taxes

January 2024 | HARDWARE RETAILING

29

2024

I N DHUI R S IT R AYN A I NL S Y ISGI S HTS

2024 OUTLOOK FOR HOME IMPROVEMENT SPEND Provided by Dave King, Executive Director, Home Improvement Research Institute

T

he economic situation, and the home improvement industry overall remains mixed based on HIRI’s Monthly Economic & Industry Update report which tracks about 40 macroeconomic variables, made available to HIRI members.

The extent to which the economy moves into a moderate recession is still dependent on the Fed’s battle against inflation, which remains stubbornly above their 2% goal. Although there are signs that the labor market is slowing, the federal funds rate will remain comparatively high throughout 2024 in an effort to cool the labor and housing markets.

The Fed has a tremendous challenge: Solving for inflation without being able to address the root cause of the issue, which is a market with too few homes for those wanting to own them.

The U.S. is estimated to have about 6 million fewer homes than it needs, and there is no skilled labor solution or financial incentives for new residential construction to address the issue.

Despite the high interest rates, still over 7%, the housing market remains relatively strong. This surprising strength in the housing market is being driven by the very low availability of existing homes for sale which is supporting home prices, even resulting in increases in many markets.

While discretionary income and savings rates have dipped from their historic highs, they remain higher than average to fuel continued home improvement expenditures. Homeowners, armed with home equity and guided by a desire to remodel-in-place rather than buy a new home that contains their upgrades, will further sustain home improvement spend.

It’s not all good news though. Through the last two years, consumer sentiment has dropped, and a lack of moving has meant fewer dollars spent getting homes ready to sell or move into. As we look toward 2024, home improvement spend is also anticipated to stabilize.

Economic indicators provide a mixed bag of positive growth versus downward pressure on growth. Overall,

30

HARDWARE RETAILING | January 2024

as consumer sentiment improves, so too does home improvement activity. The drag of consumer sentiment is evidenced in contractor backlogs as those backlogs continue to shrink and contractor confidence is in decline.

Still, HIRI’s Size of Market Forecast through 2027 is anticipating an upward march, averaging 3% year-over-year market growth, which will culminate in a total market size over $600 billion by 2027.

Doubling the total market size in just over a decade signals a market strength that stretches far beyond the short-term tremors currently impacting customer sentiments and spending behaviors.

In this era where the home has emerged as an all-encompassing sanctuary, the pursuit of home improvement is more than just an economic activity — it’s a manifestation of the desire for comfort, safety, functionality and personal expression. As the economic landscape evolves, one thing remains clear: the trajectory of home improvement continues to point upward, driven by the winds of financial prudence and the aspiration for an ever-enhanced dwelling.

See more data from this analysis when you download the complete 2024 Market Measure Report at YourNHPA.org/market-measure.

About HIRI The Home Improvement Research Institute (HIRI) is the only nonprofit organization dedicated to home improvement research.

The organization empowers its members with exclusive, ongoing home improvement data and information for making better business decisions. Members are the home improvement industry’s leading manufacturers, retailers and allied organizations. Learn more at hiri.org.

RESEARCH

Download the Data

Access the most recent Independent Retailer Index report to compare your operation quarter to quarter at YourNHPA.org/retailer-index.

SURVEYING THE CHANNEL

What the Index Tracks

THE INDEPENDENT RETAILER INDEX OFFERS REGULAR INDUSTRY ASSESSMENT

F

or more than a year, the North American Hardware and Paint Association (NHPA) and The Farnsworth Group have partnered to produce the Independent Retailer Index. This industry tracking tool serves as a regular measure of the independent channel’s performance. Reports are published each quarter, and all data is presented in aggregate.

Where Retailers Plan to Invest In every installment of the survey, we ask retailers which areas of their operations they’re planning to invest in during the next quarter. In Q1 2024, nearly 50% of respondents are putting money back into their businesses in all areas that we assess, with technology solutions being the top reported planned investment at 58%. At this time last year, retailers were planning to invest most in staff in Q1 2023 (61%).

No additional investment

•

Total sales

•

Transaction count and size

•

Inventory investment

•

Cost of goods

•

Gross profit margins

•

Future expectations

•

Retailers’ investment plans in inventory, staff, technology solutions and property, plant and equipment

Join the Retailer Research Panel The more retailers who participate in the index, the more valuable it is as a tracking tool. Scan the QR code to share your data in the next installment.

A small investment

A large investment

Unsure

Q1 2024 INVE STM E N T PL AN S Technology Solutions

12%

52%

6% 6%

I nve n tor y

45%

48%

6%

St af f/ E m pl oye e s

42%

42%

10% 6%

Pro pe r ty, P l an t or Equi pm e n t

45%

32%

19%

2%

January 2024 | HARDWARE RETAILING

31

2024

INDUSTRY INSIGHTS

How did business change for Ace Hardware in 2023 compared to 2022?

Customer traffic into our Ace stores was essentially flat versus last year. On a relative basis, that was an encouraging win. Average ticket, however, was slightly down as big-ticket items pulled back slightly.

What are some critical areas of focus for Ace Hardware going into 2024? What is the anticipated impact or benefit for your members?

Service, convenience and quality will remain our priority and ravenous focus for 2024.

What were some challenges in 2023 and how did Ace Hardware address them?

I’m really proud of our merchandising and logistics teams as they delivered five months in a row of reduced cost of goods to our Ace owners and Emery Jensen Distribution customers. While the Consumer Price Index continues to climb, albeit at a lower rate, Ace owners are enjoying deflation.

What are your projections for 2024 for the home improvement industry at large and the independent channel specifically?

I have no idea what tomorrow may bring. But we will work mightily not to get whipsawed by macroeconomic factors.

“I’m really proud of our merchandising and logistics teams as they delivered five months in a row of reduced cost of goods.”

John Venhuizen President & CEO Ace Hardware

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HARDWARE RETAILING | January 2024

INDUSTRY INSIGHTS

2024

enhanced warehouse management system (WMS) at all our warehouses. The deployment of WMS networkwide was executed with meticulous planning, ensuring a seamless transition without missing a single order. That’s an incredible accomplishment and speaks to the commitment of the Do it Best team to deliver exceptional service to our members, even when we’re undergoing a large system upgrade to sustain our projected growth.

How did business change for Do it Best in 2023 compared to 2022?

Change is the only constant, and in 2023, we embraced and leveraged it. We witnessed a stabilization of markets as consumer buying patterns shifted and the supply chain improved. The results were smoother operations and outperforming the industry in terms of reliability and fill rate.

We introduced a powerful, new e-commerce strategy and platform to generate and capture as much online activity as possible—increasing both digital and in-store transactions.

In fact, the best way for us to drive growth is to help our members’ stores capture a greater share of online sales and drive more of those customers into their stores through same-day pickup. Our platform is much more than a digital database of static content. It’s a selling tool. And our members are experiencing the benefits.

What were some challenges in 2023 and how did Do it Best address them?

After two years of record member growth, we onboarded hundreds of new members for the third year in a row and processed a record number of conversions and store projects. We continue to invest tens of millions of dollars in member growth initiatives to ensure our members are capturing market share and winning at retail.

Supporting this level of growth makes our investment in infrastructure extremely important. We’ve been on a mission to drive efficiencies and amp up productivity across our network. In 2023, we worked to expand our warehouse capacity Dan Starr and improve automation. We President & CEO completed the roll out of an Do it Best

What are some critical areas of focus for Do it Best going into 2024?

Heading into 2024, we’re laser focused on several critical areas to ensure the sustained competitiveness of our members. We’re closely monitoring deflationary signals to proactively support our members in navigating challenging economic trends. Specifically with product pricing, we’re committed to optimizing strategies to align with market dynamics and deliver value to our members and their customers.

Our focus on pricing, paired with our annual member growth plans, sets our members up for success at retail, but also to secure more market share. This approach reflects our dedication to driving growth for both our organization and our members.

With our focus on growth, we’re doubling down on our commitment to the continued excellence in the execution of infrastructure upgrades. By staying at the forefront of technological advancements, we’re enhancing the overall efficiency of our operations, which translates into improved costs and services for our members.

What are your projections for 2024 for the home improvement industry at large and the independent channel specifically?

Our business is strong. We anticipate another year of strong Do it Best member growth. We’re optimistic and so are our members. They’re positioned for growth.

At the end of the day, we believe in the independent entrepreneur and we know they can win. In fact, independents have been especially successful over the last few years—leveraging opportunities to continue to pull shares from the big boxes. The independent entrepreneur is alive and well—and with Do it Best as a partner—an unstoppable force.

“We’ve been on a mission to drive efficiencies and amp up productivity across our network.”

January 2024 | HARDWARE RETAILING

33

2024

INDUSTRY INSIGHTS

persisted in 2022 and 2023. We were forced to conduct virtual events and meetings and had to delay plans to bring distribution center operations personnel together. To combat this, we made exciting strides in 2023 to learn and collaborate by conducting and attending in-person shows and a Distribution Center Workshop, hosted by Blish-Mize in Atchison, Kansas.

The Distribution Center Workshop allowed operations managers to discuss common challenges and the best practices to combat them to make material handling and operations more efficient as a whole.

How did business change for Hardlines Distribution Alliance in 2023 compared to 2022?

In 2023, at Hardlines Distribution Alliance (HDA), we worked to streamline our marketing, merchandising and accounting processes and forged strong partnerships as a single organization since HDA began in April 2022. In addition, we continued to adapt to the postpandemic home improvement marketplace. Disruptions in the supply chain, including pockets of scarcity and oversupply, presented challenges to purchasing and sales teams throughout our network. Overall, our distributor members have returned to pre-pandemic fill rates in the mid to high 90% range, which is a great improvement from 2022.

What were some challenges in 2023 and how did HDA address them?

One of HDA’s primary objectives is to share ideas, innovations and best practices with our diverse and robust network. The pandemic had a detrimental effect on our ability to host in-person events and network during an unprecedented economic period that deeply impacted the market and consumer spending habits. These economic shifts, including difficulties finding and retaining employees and the growing cost of operations due to inflation, have

Shari Kalbach President HDA

Steve Synnott CEO HDA

34 HARDWARE RETAILING | January 2024

What are some critical areas of focus for HDA going into 2024? What is the anticipated impact or benefit for your members?

At HDA, we focused on executing several new data integration systems in 2023 in the final phases of aligning former Distribution America and PRO Group operations. As we welcome 2024, distributor members and vendor partners will benefit from these improved systems that more efficiently execute accounting processes and support the group’s buying power. In addition, streamlined promotional systems will highlight the value available to all members and partners within the HDA network.

What are your projections for 2024 for the home improvement industry at large and the independent channel specifically?

While certain segments of the market are forecast to grow in 2024, our overall prediction is for flat sales performance compared to 2023. Growth of less than 1% magnifies the need to operate efficiently, streamline product and promotional delivery and trim costs without compromising value delivered to customers. We believe the ongoing effects of inflation and rising mortgage rates will dampen new construction and remodeling projects while repair and maintenance segments will attain modest growth.

HDA’s network concentrates more heavily on repair and maintenance, which are the segments we hope will see modest growth in 2024.

“One of HDA’s primary objectives is to share ideas, innovations and best practices with our diverse and robust network.”

INDUSTRY INSIGHTS

How did business change for Orgill in 2023 compared to 2022?

After growing 21% in 2020, 14% in 2021 and 9% in 2022, we expect our sales in 2023 to be flat to down 1%. This has been a significant shift from working to grow as fast as we can to support our customers through extraordinary growth to now managing through a softening in the industry that is projected to be down 3% in 2023. We’re proud that we are able to continue to outperform the industry.

We were glad to see the inflationary environment ease and focused on helping our customers manage their inventories and pricing strategies as we managed through some deflation on some products.

As traffic in the industry slowed, we focused more on helping our customers drive promotional business and footsteps into their stores. In fact, our quarterly buying events grew slightly, up 0.3% this year, and our popular PMAPP promotional program (primarily power tools and accessories) has more than doubled.

What were some challenges in 2023 and how did Orgill address them?

In addition to what I’ve already mentioned, our No. 1 challenge and focus in 2023 was to return to our standard on service level to exceed 96%.

We had set a goal to exceed 90% by the end of the third quarter, which we hit. Our goal is to exceed 95% by the end of the year, which we’ll approach, but may not exceed. This remains our biggest challenge and top focus as we know how important it is for us to be able to deliver what our customers need, when they need it, at the Boyden Moore lowest possible price.

President & CEO Orgill

2024

What are some critical areas of focus for Orgill going into 2024?

In addition to our focus on service levels to our customers, we are working hard on some critical projects for 2024. We expect to complete the construction of our new distribution center in Tifton, Georgia, during the first quarter. We are implementing new technologies to Orgill, including robots and artificial intelligence in a new goods-to-person picking module.

We expect this new technology to increase our speed, capacity and accuracy, as well as being able to better customize what we put in each tote. If this works as well as we expect in Tifton, it will lay the foundation for further improvements in all our distribution centers.

We are also working on the construction of a new concept center adjacent to our home office in Collierville, Tennessee. At 500,000 square feet, this new concept center will double the size of our existing center and create even more space for the customized work we do with our customers. We are proud to serve a very balanced breadth of customers in the industry. We know that customized assortments focused on our customers’ brands and the specific markets they serve drive more success.

As a result, we manage more planograms in the industry than all of our competitors—combined. This concept center will double-down on our strength in this area and also provide us a unique facility to imagine some new Orgill and industry events for our customers and vendors.

With a projected slower growth environment, we are focused on driving more significant promotional business opportunities for our customers. We are also working to drive better gross margins through our retail pricing programs. Our FanBuilder® loyalty program continues to grow. Our entire mission is “to help our customers be successful.” We are working to expand all the ways we can envision executing that mission.

What are your projections for 2024 for the home improvement industry at large and the independent channel specifically?

We are expecting the industry to be flat to down 1% in 2024. We expect the second half to be a little stronger than the first half.

We believe that the independent channel has an opportunity to outperform big boxes, and we’ll be working to help our customers pick up market share. As a result we’re planning on growth at Orgill of about 2% for 2024, also reflecting some exciting new business opportunities that are in development.

“In addition to our focus on service levels to our customers, we are working hard on some critical projects for 2024.”

January 2024 | HARDWARE RETAILING

35

2024

INDUSTRY INSIGHTS

How did business change for True Value Co. in 2023 compared to 2022?

Our unwavering focus this year has been on continuing to improve our customers’ experience with True Value, at every level. From supply chain upgrades and operational improvements to investing in our legacy brand, we’ve been dedicated to helping our customers run, operate and grow their businesses. We continued to streamline and focus our product assortments in line with our 2022 approach, which led to impressive growth rates in many categories, including 6% growth above the broader hardware market and a 21% increase in average ticket size. As we marked 75 years of the True Value brand, we welcomed new stores to the True Value family and invested millions of dollars to date in opening new stores and remodeling existing retailers.

What were some challenges in 2023 and how did True Value address them?

We faced the same challenges that were prevalent across the industry, with a slowing and changing economic landscape and shifting consumer preferences. True Value approached this head-on by maintaining a strong focus on partnering with our customers to support and grow their independent businesses, which looked like consistently adapting to the current environment and leveraging our scale to help our customers do the same. We proactively communicated market trends and impacts, and introduced new programs and services tailored to help our customers navigate these challenges within their specific communities. By staying connected with our customers, understanding their unique needs and providing them with valuable Chris Kempa support, we have been able to CEO effectively weather these obstacles True Value together.

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HARDWARE RETAILING | January 2024

What are some critical areas of focus for True Value going into 2024?

As we kickoff 2024, True Value has several critical areas of focus, including significant investments in logistics and our iconic brand. We’re working to enhance our operational efficiency to provide best-in-industry services to our retailers. One specific investment is the implementation of space planning software that will optimize retail space and support the rollout of new assortment launches.

Additionally, we are committing to a multiyear $20 million investment in new order management and warehouse management systems to provide the most accurate inventory counts and allow stores to reserve specific inventory for their needs. True Value customers will have the best inventory management and product availability to serve their business.

Additionally, you’ll see True Value in new and exciting ways across various markets to help our retailers’ shoppers connect to the value of their local, independent hardware store.

What are your projections for 2024 for the home improvement industry at large and the independent channel specifically?

The industry experienced a significant boon during the pandemic era, and in the past year, we have seen the market continue to stabilize. However, consumers are telling us the entire industry needs to evolve to meet the challenges of our new landscape.

The independent channel stands out for its ability to leverage the expertise of in-store staff and their deep understanding of their local communities, which we fully expect to see continue this year. Our retailers are particularly great at this, and we’ll continue to emphasize their personalized service, expert advice and the positive impact of supporting local businesses.

As always, we remain committed to building and maintaining partnerships with our customers by offering support for them to effectively run, operate and grow their businesses in their unique ways. By prioritizing collaboration and understanding individual needs, we aim to deliver tailored solutions and empower our customers to thrive.

“The independent channel stands out for its ability to leverage the expertise of in-store staff and their deep understanding of their local communities.”

RESEARCH

Download the Data

See more data from this analysis when you download the complete 2024 Market Measure Report at YourNHPA.org/market-measure.

2024 CANADIAN MARKET OUTLOOK CANADIAN DEALERS REMAIN BUSY AMID FLATTENING SALES

C

Provided by Michael McLarney, President, Hardlines Inc.

anada’s retail home improvement industry returned to something close to normal in 2022 and 2023. While Canadian dealers remained busy through the past year, many will struggle to meet the sales levels of 2022, when the country’s retail hardware and home improvement industry grew to more than CD$61 billion.

The fact is that 2022 was a tough year to follow.

Home improvement retailers enjoyed unprecedented sales growth through the COVID years, with overall sales volumes increasing by more than 30% from 2019 to 2022.

Pre-pandemic, this industry was watching sales slow to the point that, in 2019, Hardlines reported negative sales growth for only the second time since we began tracking the industry almost 30 years ago. A year later, sales increased by a whopping 15.5%, leaving retailers struggling to meet demand while suppliers scrambled to get product, raw materials and access to shipping lanes. The following year saw double-digit growth again, but by 2022 that growth had slowed—or normalized—to less than 5% year-over-year (and below the 6.8% rate of inflation).

HOW DEALERS HAVE FARED Building centers enjoyed the biggest growth in 2022, up 6.5% from 2021. Hardware stores had the smallest gain, up only 1.3% year over year. Big-box stores, including Canadian Tire, with larger formats and bigger overheads, were impacted by softening consumer demand for renovation spending. Their collective sales are expected to be flat or negative for 2023.

We calculate that Home Depot Canada’s online business is up near 10%, while RONA’s is estimated at about 12%.

Canadian Tire’s e-commerce sales penetration reached 11% in 2022 and settled back closer to 10% this past year.

But for independent dealers, the reality is quite different.

Canadian hardware and building supply dealers that sell online averaged 0.9% of their overall sales through e-commerce. The majority of dealers cite zero online sales,

even though e-commerce was cited as one of the top three concerns for dealers in 2023.

ECONOMIC FACTORS NOT IN DEALERS’ FAVOR As interest rates remain high, high borrowing costs put pressure on housing affordability and on renovation investment, while higher prices for food and essentials are putting further limits on consumers’ discretionary spending abilities. High borrowing costs have curtailed the appeal of homebuying, leading to fewer reno projects. Additionally, the effects of the strike among British Columbia port workers last summer had repercussions that lasted for months. For manufacturers awaiting products from Asia, the impacts were vexing, and the result was more interruptions in a supply chain that was struggling to get back on line.

By the end of the third quarter, Canada had technically stayed clear of a recession—three consecutive quarters of flat or negative growth in gross domestic product. Even if the fourth quarter has weak GDP, the consensus among economists is that the recession will not be deep, nor too long. Interest rates are expected to begin falling gradually by the middle of 2024, which should give consumers more confidence—and more discretionary dollars.

Major retailers anticipate flat to negative growth of between 2% and 4% for the year, and our surveys of the retailers in this sector, large and small, have forecasted largely flat sales growth this year. There are exceptions; Alberta, which enjoyed solid growth in 2022 of almost 8%, should have another strong year in 2023. It has seen a positive in-migration of Canadians from other parts of the country, which has boosted some housing and renovation markets. And Prince Edward Island, which had modest growth of 2% in 2022, has some of the country’s most streamlined immigration rules. As a result, it is benefiting from an influx of new Canadians.

Despite these strong spots, Hardlines forecasts that growth for the sector will be stable at best for 2023, with growth in 2024 of less than 4%.

January 2024 | HARDWARE RETAILING

37

MIX IT UP Lee’s Home Center is meeting customer needs with a distinct mix of LBM products.

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HARDWARE RETAILING | January 2024

OPERATIONS

Deck Building Know-How CATEGORY SPOTLIGHT

Learn how to educate customers on choosing the best options for decking materials at hardwareretailing.com/decking-materials.

Stay Light on Your Feet Pivoting to Build a Better LBM Category BY

JACO B

M US S E LM AN

A

t Lee’s Home Center in Millstadt, Illinois, building materials category evaluator Brayden Vogel identified a problem and is doing his part to fix it.

Since starting at Lee’s Home Center in 2019, Vogel has seen a shift in the needs and wants of his customers and continues making the necessary adjustments to improve the store’s lumber and building materials (LBM) category.

Vogel recognized a decline in shingles and other roofing material sales at his operation because other stores in his area were offering services his store couldn’t. Gradually, he began removing those items from the shelves and replacing them with other items that did sell like lumber, composite decking and signage and lettering.

In the past three years, Vogel says changing up the product selection in the store’s LBM department by adding new options and removing others has come naturally as he’s seen what his customers need.

Offering composite decking is one of these big shifts. Vogel says customers still love real wood, but he alerts them to the pros and cons of using the material for their projects.

“We educate our customers that they’ll have ongoing maintenance and rotting concerns if they go with cedar or treated wood,” Vogel says.

“So far, I’ve received minimal complaints on the composites and cap composites sold, and many composite wood materials on the market come with extensive warranties.”

January 2024 | HARDWARE RETAILING

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Lumber Prices Roller Coaster After a volatile 2021 and 2022, the price per 1,000 boards has settled slightly above pre-pandemic prices. Even in light of cooling lumber prices, composite wood options provide customers with a cost-effective and low-maintenance alternative to real wood.

Lumber Pricing Shifts 2022-2023 (1,000 board feet, in USD) 600

$597

$579 $534

$511

$513

500

$485

$524

$496

$488

AUG 2023

OCT 2023

400

300

200

100

0 AUG 2022

DEC 2022

OCT 2022

FEB 2023

APRIL 2023

JUNE 2023

SEPT 2023

Source: Historical lumber prices from nasdaq.com

“We have customers who have been with us for a long time. They don’t go somewhere else to get LBM products because they’re concerned about deliveries, customer service and product quality, all areas we excel at.”

—Brayden Vogel, Lee’s Home Center

40 HARDWARE RETAILING | January 2024

CUSTOMERS FIRST Lee’s Home Center goes above and beyond with delivery and helpful customer service.

Another bonus of composite is that any of the accessories for composite decking, such as composite-specific screws, trim and fasteners, have higher profit margins as well.

“While finding new products to sell in this category can be difficult, it’s still a profitable category,” Vogel says.

“It’s an easy category to increase margins.”

Focusing on Customer Service

While Lee’s Home Center stopped offering certain LBM products, employees didn’t stop providing a high level of customer service.

“We have customers who have been with us for a long time,” Vogel says. “They don’t go somewhere else to get LBM products because they’re concerned about deliveries, customer service and product quality, all areas we excel at.”

Lee’s Home Center recently supplied materials to a hotel in Columbia, Illinois, including exterior commercial doors and new construction hardware. For the new hotel construction project, Vogel says the company in charge of the build went with Lee’s Home Center because it was local and able to get the products they needed on special order.

Contractors and professional customers need to be able to rely on the source of their products and get them in a timely matter, so being able to deliver has been key to customers choosing Lee’s Home Center.

“Offering this level of customer service sets us apart from the bigger box stores such as Lowe’s or Home Depot,” Vogel says. “We hear the horror stories of customers trying to buy a commercial door other places and not being satisfied with the level of customer service offered.”

January 2024 | HARDWARE RETAILING

41

ASSOCIATION

Be in the Know NEWSMAKERS

NHPA offers a range of newsletters and digital content sharing industry news, trends and information. Sign up at YourNHPA.org/subscribe.

What You Need to Know in January

Nation’s Best Hosts Networking Women’s Retreat

Houzz Predicts 2024 Home Design Trends

The company’s inaugural Women’s Leadership Retreat offered a weekend of self-reflection, skill-building and networking.

The new year brings new styles and new design trends, and 2024 will bring back styles from the past, strong visual designs and handmade features.

Aubuchon Partners With Upside for Cash-Back Options

James Hardie Announces Inaugural Exterior Color of the Year

This collaboration marks a milestone as The Aubuchon Company is the first hardware operation to partner with the digital marketplace that allows consumers to earn cash back for purchases.

Mountain Sage is a green hue selected based on input from industry experts, combined with data and insights uncovered from James Hardie’s comprehensive Homeowners Survey.

Home Depot and Lowe’s Report Reduction in Sales in Q3 2023 Both big-box home improvement retailers marked a drop in sales in the third quarter of 2023 compared to the same time period in 2022.

To read these news stories and other news, visit hardwareretailing.com/industry-news.

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HARDWARE RETAILING | January 2024

EDUCATION

Explore NHPA’s Educational Offerings Visit YourNHPA.org/academy for information on our solutions for your growing business.

In Other News

65%

Federal Reserve Proposes Lower Cap on Debit Card Swipe Fees The Federal Reserve released a proposal to lower the cap on debit card transaction fees, known as swipe fees. The Fed’s proposal would cap the amount of money large banks are allowed to charge retailers to process debit card transactions to 14.4 cents, plus an additional 1.3 cents for fraud prevention and 0.04% of the transaction amount for fraud costs.

of voters support swipe fee reform

Source: Merchants Payment Coalition Swipe Fee Reform Survey, Pierpoint Consulting & Analytics LLC

To read this news story, visit hardwareretailing.com/industry-news.

“Despite the decreases, our performance is on par with expectations, attributing the declines to consumers taking on smaller projects and avoiding higher ticket purchases.”

—Ted Decker, The Home Depot company chair, president and CEO

READ MORE

sales in billions

net income in billions

The Home Depot 40

38.9

Lowe’s Co. 40

37.7

30

30

20

20

10

4.3 Q3 2022

3.8 Q3 2023

10

23.5

20.5

4.3 Q3 2022

1.8 Q3 2023

January 2024 | HARDWARE RETAILING

43

NETWORK

Make a Plan CALENDAR

Visit YourNHPA.org/cal to find more industry events online.

This index is provided for the convenience of our advertisers and readers.

The publisher assumes no liability for errors or omissions.

House-Hasson .........................................................................................................5, 7 househasson.com Midwest Fastener Corp. ............................................................................. IFC-1 fastenerconnection.com NHPA Foundations of Merchandising Management Live! ...45 YourNHPA.org/foundationslive

House-Hasson Winter Market January 25-27 | NASHVILLE, TN

NHPA Retail Marketplace .......................................................................................... 47 YourNHPA.org/marketplace NHPA Young Retailer of the Year ................................................................... BC YourNHPA.org/yroty

2024 Lancaster Buying Show February 2-3 | ORLANDO, FL

True Value Spring Reunion February 2-4 | NEW ORLEANS, LA

United Hardware Spring Buyer Market February 15-16 | ST. CLOUD, MN

Monroe Hardware Spring Market February 16-18 | MYRTLE BEACH, SC

Orgill Spring Dealer Market February 22-24 | ORLANDO, FL

Orgill Inc. .............................................................................................................48-IBC orgill.com Paladin Data Corp. ..................................................................................................13 paladinpointofsale.com Phifer Inc. ........................................................................................................................15 phifer.com Uline .................................................................................................................................... 19 uline.com Woodland .........................................................................................................................21 pinecar.com

NAHB International Builders’ Show February 27-29 | LAS VEGAS, NV

Kitchen & Bath Industry Show February 27-29 | LAS VEGAS, NV

Ace Hardware Spring Convention March 12-14 | DALLAS, TX

Emery Jensen Edge March 12-13 | DALLAS, TX

The Inspired Home Show March 16-19 | CHICAGO, IL

Blish-Mize Spring Buying Market March 21-23 | OVERLAND PARK, KS

Do it Best Spring Market March 23-25 | HOUSTON, TX

National Hardware Show March 26-28 | LAS VEGAS, NV

Wallace Spring Dealer Market March 26-28 | SEVIERVILLE, TN *Events are current as of press day.

To add your event to the industry calendar, send an email to editorial@YourNHPA.org.

44 HARDWARE RETAILING | January 2024

Training Tools To Grow Your Business From the Inside Out Discover the full array of programs, resources and opportunities NHPA provides the industry in the 2024 Academy Catalog at YourNHPA.org/academy or by scanning the QR code.

Register by February 1, 2024

Tony Corsberg

Foundations of Merchandising Management Live! Instructor

Principal, Merchant 5 Advisors

40+ years of merchandising management experience in home improvement retailing

Improve Your Merchandising to Drive Additional Sales Foundations of Merchandising Management Live! is back at the National Hardware Show, March 26-27, 2024. Get hands-on training and valuable merchandising strategy insights from the North American Hardware and Paint Association (NHPA) at the hardware industry’s leading annual event.

Hurry, seating is limited! Register by February 1, 2024

YourNHPA.org/foundationslive

ASSOCIATION

Become an Industry Beacon Want to learn more about how to become an amabassador?

Reach out to Renee Changnon at rchangnon@YourNHPA.org.

LAST WORD

STAYING FLEXIBLE N H PA A M B A S S A D O R

Dalton Meny Enjoys the Everyday Challenges of the Industry DALTON MENY Store Meny's True Value Location 3 stores, Southern Indiana

What is your proudest moment as part of the independent channel?

I would say my proudest moment was being named a 2022 Young Retailer of the Year honoree and being invited to speak on a panel at the 2022 NHPA Independents Conference in Dallas.

What is the best part of your job?

I like the flexibility and spontaneity that comes with it. Every day is different and offers many different types of challenges that need to be solved.

What is the best piece of professional advice you’ve ever been given?

Be patient. Great things will come in time but don’t happen overnight. You’ll have many years to leave your mark.

PA

AM B AS S A

D OR

NH

How do you stay involved in the community?

We try to give as much back to the community as possible through

sponsorships and fundraisers.

Also, starting in 2024, I will be a board member of the Jasper Chamber of Commerce.

When you were a kid, what did you want to be when you grew up?

I never knew what I wanted to be when I grew up, only that I didn’t want to be part of the family business. It’s funny how that turned out.

What kind of music do you like to play in the store?

It changes day to day depending on who else is working. There is always a battle over what is on the radio.

What do you do for fun when you’re not working?

When I’m not working, I enjoy hanging out with friends, playing video games and watching movies.

About the Program The North American Hardware and Paint Association (NHPA) is excited to introduce the newly formed Ambassador Program in 2024. The program brings together a small group of NHPA members from across the industry who are passionate about the independent home improvement channel and have a deep involvement with the association. NHPA Ambassadors help connect their retailer networks to NHPA, encouraging retailers to become more involved with the association’s offerings, like online training, consulting, college-level courses and more.

46 HARDWARE RETAILING | January 2024

The industry’s marketplace for buying and selling independent home improvement businesses and posting jobs.

BUSINESS FOR SALE

BUSINESS FOR SALE

Northwest Farm & Home Supply Co.

Home Improvement Supply Store Location: Missouri Gross Revenue: $1.04 million

Location: Lemmon, SD Gross Revenue: $3.21 million The main building is a total 27,213 sq. ft. of retail and warehouse space on 4 acres. The main bldg. was constructed in 1994 with additions constructed in 2002 and 2004.

Single story with 22’ clear height in 11,459 sq. ft. of lumber warehouse, three grade level doors and two dock height doors.

BUSINESS FOR SALE

This historic home improvement and hardware store is a staple of its community and operates from its headquarters in the Kansas City Metropolitan Area of Missouri.

The Company is a long-standing retailer and installer of consumer and commercial improvement products.

BUSINESS FOR SALE

Hoosick True Value

Albrights Hardware & Garden Center

Location: Hoosick Falls, NY Gross Revenue: $1.26 million Price: $1.875 million This opportunity offers a turnkey sale of a general hardware business located in northeastern Rensselaer Co., New York. The business serves five towns and southwestern Bennington Co., Vermont, and 25 miles east of Troy, New York.

Location: Allentown, PA Gross Revenue: $1.9 million Price: $1 million

BUSINESS FOR SALE

Central Vermont Paint, Flooring and Decorating Business Location: Vermont Gross Revenue: $2.82 million Price: $1.1 million

Full-service decorating store providing flooring, paint, window treatments, kitchen/bathroom remodeling, cabinetry product offerings, design assistance, specialized service, and professional installation.

BUSINESS FOR SALE

Private Business

Location: Alabama Gross Revenue: $2.21 million Price: $649,000

Albrights Hardware is an established hardware store with strong neighborhood ties and has been a Lehigh Valley staple for over 50 years. The current owners have owned the store since 1992. Albrights serves its loyal customer base by providing quality products and exceptional customer service.

BUSINESS FOR SALE

SEEKING BUSINESSES

SEEKING BUSINESSES

SEEKING BUSINESSES

For our next acquisition, we are looking for:

We are looking for:

We are looking for:

The Aubuchon Company

• • • •

Single-store and multi-store hardware operations Located in northeast and southeast United States Store size of 5,000-30,000 ft2 At least $3 million in average store sales

Bolster Hardware • • • • •

Private Business

Location: Pennsylvania Gross Revenue: $1.6 million

Gold Beach Lumber Yard

Geography agnostic With or without real estate Store revenues of $1.5M+ We prefer to honor the family name and heritage in the local community by not changing the name We prefer to keep all employees as part of the acquisition

• • •

Single-store and multi-store hardware operations Located in the Pacific Northwest Store size of 5,000 ft2-30,000 ft2

Now Offering Business Valuations Post a Job | Sell Your Business | Buy a Store | Public and Private Listings Available To see full listings, visit YourNHPA.org/marketplace or email marketplace@yournhpa.org

2024

DEALER MARKET & Spring Online Buying Event

Score the best buys of the year! Register now for our in-person Dealer Market, happening Feb. 22 – 24 in Orlando, Fla. There you’ll see our industry’s newest products, talk to vendors, attend workshops and clinics, network with other dealers, and experience two concept stores – a pro store and a traditional hardware store.

And don’t miss our red-hot Flash Deals.

Plus, our Spring Online Buying Event, which runs Feb. 19 – March 3, is your chance to round out your spring buys with online-only deals, offers, and more.

Register now for Dealer Market and be automatically enrolled in our Spring Online Buying Event. We’ll see you soon!

Register online at Orgill.com/Orlando2024

Become a Subscriber Stay up to date on news, products, events and more when you sign up for any of our e-newsletters.

YourNHPA.org/subscribe

2024

DEALER MARKET & Spring Online Buying Event

Get Ready, It ’ s Coming!

Score the best buys of the year! Register now for our in-person Dealer Market, happening Feb. 22 – 24 in Orlando, Fla. There you’ll see our industry’s newest products, talk to vendors, attend workshops and clinics, network with other dealers, and experience two concept stores – a pro store and a traditional hardware store.

And don’t miss our red-hot Flash Deals.

Plus, our Spring Online Buying Event, which runs Feb. 19 – March 3, is your chance to round out your spring buys with online-only deals, offers, and more.

Register now for Dealer Market and be automatically enrolled in our Spring Online Buying Event. We’ll see you soon!

Register online at Orgill.com/Orlando2024

CALL FOR 2024 NOMINATIONS

Recognizing young leaders who represent the future of independent home improvement retailing A P H

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Nominations are now open for the 2024 Young Retailer of the Year awards!

AN

Youn Reta g iler Year

UA

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NHPA

North American Hardware and Paint Association

E

of th e

28TH Do you know an inspiring young retailer?

Submit your nomination by February 28, 2024.

Learn more at YourNHPA.org/yroty.

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WARDS PR

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