Hardware stores are well on their way to permanently ending up in the category of essential services or daily necessities that private investors have been focusing on for years. This year, home improvement activities have increased dramatically, with 40% of consumers saying they intend to continue home improvement projects beyond the recession, according to research by the NPD group. The activity increased home improvement store sales by 11% this year.
During the pandemic, DIY stores became the second fastest retail segment in both brick-and-mortar and online sales. In the lawn and garden, tools, paint, kitchen, bathroom and hardware segments, online and in-store purchases each recorded a double-digit increase. The average shopping trip also increased 10% compared to the average trip in 2019.
Home Depot versus Lowes
Placer.ai, which also took an in-depth look at shopping trends from major hardware store brands, found Lowe saw an early rise in sales in April, up 14.1% for the month. Home Depot, on the other hand, didn't see sales surge until May when activity rose 26%. In the same month, Lowe further outperformed its competitor, posting a 46.6% increase in sales. Lowes continued to outperform Home Depot through the pandemic, despite both seeing significant increases in activity and narrowing the gap. In June and July in particular, the significant sales growth continued, long after the normal high season for home improvement.
A long-term trend
Weekly visits continued to show strong sales through early August, the latest data available. According to Placer.ai, this suggests that the home improvement trend could be long-term, as data from the NPD group also suggest. Activity was driven in part by the fact that people are staying home more, as well as homeowners who may have had to delay new home purchases due to economic concerns. Instead of modernizing or buying a new home, these homeowners are renovating. This latter trend could propel home improvement activities beyond the pandemic.
For landlords, the strong sales activity has also led to strong rental income from the pandemic. Actually, DIY collections According to research by BTIG, they were 97% at the level of rental grocery collections. Home improvement retailers have also continued leasing and expansion through the pandemic, another signal to landlords that the retail segment is a good choice for the future.