COVID-Era Big-Box Sales Surge in Q2
authors Emily Blackburn | August 24, 2020
Further evidence of the unprecedented, Covid-era surge in demand for home improvement products and services came thundering out of boffo earnings reports from the nation’s two leading big-box chains. Home-improvement-retail giants—The Home Depot and Lowe’s Company Inc.—posted significantly higher second quarter revenues driven by increased demand from pros and do-it-yourselfers.
Home Depot reported net earnings of $38.1 billion for the second quarter of 2020, a 23.4 percent increase from the year prior. Similarly, Lowe’s reported net earnings of $2.8 billion for the second quarter, compared to net earnings of $1.7 billion at the same time a year ago.
“Home improvement comps were 35.1 percent due to robust project demand from DIY and Pro customers,” Lowe’s CEO Marvin Ellison said. “Overall, we saw a sharp acceleration from Q1 demand trends, including significant increases in the number of new Pro and DIY and millennial customers. Pro sales were strong with comps in the mid-20s with demand accelerating in May and remaining strong throughout the quarter.”
The company’s urban stores outperformed rural stores by 500 basis points and the company’s website store was up 135 percent during the quarter versus the year prior. And both Lowe’s and Home Depot have been ramping up services directed attracting more professionals to their locations nationwide.
New Programs for Pros Rolled Out
Through the COVID-19 business disruptions, both Lowe’s and Home Depot have invested in helping professionals generate leads. In particular, Lowe’s teamed up with Denver-based HomeAdvisor to provide its pro loyalty program members a free, year-long HomeAdvisor subscription. Qualifying Lowe’s Pro loyalty members will also get a credit for 10 free leads from homeowners looking to complete home projects. Additionally, Lowe’s Pro loyalty members get access to business webinars with notable entrepreneurs and experts.
“There has been a fundamental shift in the value and importance we place on our homes, and homeowners have a renewed interest in hiring pros for help with home projects,” said Craig Smith, president and chief operating officer, HomeAdvisor.
HomeDepot said it used this period of financial growth to invest approximately $480 million in additional benefits for its associates, including weekly bonuses for hourly associates in stores and distribution centers. Additionally, their first half performance resulted in a record payout for Success Sharing, Home Depot’s profit-sharing program for hourly associates. The goal, the company says, is to create happier employees who in turn provide higher service levels to its customers, specifically pros. This focus on improving relationships between Pros and associates and has never been more important, and finding ways to provide the tools and resources for home improvement pros to navigate the disruptions mitigates those challenges.
Tools, Equipment Rentals for Pros
Lowe’s also launched a multi-year, tool-rental program roll out until the program is in all stores nationwide. The new program will help them compete with Home Depot’s existing rental program.
Lowes said the new program will feature: commercial-grade equipment, with brands like Husqvarna, Bosch and Metabo HPT; a range of drain cleaning, restoration, sanitation and concrete tools; merchandise to accompany rental tools, such as protective equipment and cleaning solutions, for purchase; an online check-in and check-out process; in-store self-service kiosks and digital documents that can be signed and viewed from a mobile device; a dedicated team of knowledgeable associates who can provide hands-on product demonstrations and a mechanic shop to service tools and space for on-site cleaning and product demo areas. QR