Industry Overview

Companies in this industry manufacture and sell building supplies, lumber, hardware, and other home improvement products. Major companies include Home Depot, Lowe’s, and True Value (all based in the US), as well as Kingfisher (UK), Leroy Merlin (France), and OBI (Germany).

Competitive Landscape

Home remodeling and repair and new homebuilding drive demand. The profitability of individual companies depends on low-cost purchasing, effective merchandising, and competitive pricing. Large companies can offer wide selections, supply high-volume goods to builders, and have advantages in purchasing, finance, distribution, and marketing. Small companies can compete by offering specialty products, providing superior service, or serving a local market.

Products, Operations & Technology

Major products for US home centers include lumber and building supplies (35 percent of sales); hardware, tools, and plumbing and electrical supplies (20 percent); and lawn and garden products (10 percent), and paint and sundries (10 percent). Hardware stores tend to make more of their sales (about 60 percent) from hardware, tools, plumbing, and electrical supplies. Building supplies include doors, windows, masonry supplies, cabinets, and countertops. Lawn and garden supplies include lawn care machinery; outdoor nursery stock (trees and shrubs); and fertilizers. Home centers often carry a full line of appliances. Companies may also offer installation, delivery, design, or tool rental services.