In late April stay home orders were wide-spread, businesses were closed, remote workers were in the middle of a crisis and a Havard University report predicted that spendings on home remodeling was going to drop. Turns out they were wrong.
As people spent more time in their homes, they got tired of their surroundings and thus decided to do something about it. Since homeowners did not spend money on vacations, restaurants, and movies, they decided to pour their money into home remodeling. By June, demand for outdoor remodeling professionals had gone up by 60% since 2019 and requests estimates for kitchen and bath makeovers were up by about 40%.
Among the beneficiaries of the domestic spending were are Home Depot and Lowes. Hardware stores are considered essential businesses, thus were not closed and customers kept revolving through their doors. Both retail giants demolished their optimistic expectations in their respective earnings calls. Home Depot’s second quarter revenue shot up by nearly 25% over last year. Lowes had a 30% spike in sales. Lowes’ bigger bump is a result of its customer makeup, which includes slightly more DIY remodelers. DIY remodelers have been a big driver of the home improvement trend.
According to the Wall Street Journal, Lowes has done a better job in appealing to these consumers. Home Depot, however, has been more successful in coding contractors. Remote workers have been moving from their tiny city apartments in search of open spaces and have been finding suburban homes with small mortgage rates and high renovation needs, which require professional help. Home improvement retailers have both taken different approaches in response to the demand too.
Home Depot is opening three new distribution centers in its home state of Georgia over the next 18 months. These centers will be used to help support the growing demand for flexible delivery and pickup options for professionals and DIY customers. Lowes contrastingly is going for a more distributed approach. It is planning on opening 50 delivery tunnels, 7 distribution points, and 4 e-commerce fulfillment centers within 2 years. Lowes is confident that smaller centers placed strategically around the country will help get products to the homeowners faster, giving the retailer an edge over its rival. The people buying, building, and renovating homes tend to be higher and with no COVID-19 vaccine or cure likely through at least the end of this year, analysts believe that people will continue spending more money to create the homes they desire.
Do you think now is the perfect time to get into the home remodeling industry? Let us know down in the comments.
This article originally published on GREY Journal.