The 2020 Mid-Year Economic Update_long

Home Depot ‘Trouncing’ Lowe’s in Battle for Pro Customers

Report: Big-box competition for B2B business a blowout so far.

In an escalating battle for pro customers among relatively new players in the B2B space, Home Depot is “consistently trouncing Lowe’s,” according to recent analysis from Yahoo Finance.

“Home Depot has catered more aggressively to what’s known as the professional customer, which includes remodelers, general contractors and small business owners,” writes the article’s author, Nicole Sinclair. “In fact, 40 percent of Home Depot’s sales come from this customer category, which tends to spend more, take more trips to the store and conduct bigger projects. In contrast, Lowe’s only gets about 30 percent of sales from this category.”

Home Depot’s second-quarter sales were $28.1 billion, a 6.2 percent increase over the same period a year ago. It reported nearly 10 percent sales growth to pro customers compared to 4.6 percent sales growth to DIY customers, while Lowe’s most recent pro sales were estimated at just 4 percent, according to analysis from Wedbush. Lowe’s today reported its second-quarter sales.

MDM has written extensively about Home Depot’s 2015 blockbuster acquisition of Interline and its decision to go “all in” on MRO business, as President and CEO Craig Menear claimed on an earnings call last year.

Competition heated up just a few months ago when Lowe’s bought Houston, TX-based Maintenance Supply Headquarters, a distributor of MRO products to the multifamily housing industry. That acquisition followed previous purchases of RONA Inc., a Canadian retailer and distributor of hardware, building materials and home renovation products, and Central Wholesalers, an MRO distributor in the Mid-Atlantic and Northeast.

These moves have changed the competitive landscape in MRO distribution, but they might have also helped the two big-box giants – especially Home Depot – insulate themselves from such threats as Amazon.

“Serving pros while big-ticket items have been in focus as these areas are seen as more immune to encroachment by online retailers,” Sinclair writes. “Home Depot has continued to drive share in these categories with more exclusive products, more financing options and more delivery alternatives.”

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