Home improvement sector still strong despite less in-store foot traffic

You might have woken up on Tuesday to headlines about The Home Depot’s shares falling, but there’s more to the story. 

While its shares fell nearly 5% due to a 5.8% drop in customer transactions, Ethan Chernofsky, VP of marketing at Placer.ai, told Retail Brew this is hardly cause for concern. 

“The home improvement sector saw such an insane surge that it was almost by definition going to see some sort of return to normalcy,” he said. “Home Depot and Lowe’s both are seeing visits still significantly higher than they were in 2019.”

By the numbers: The home improvement companies still had YoY revenue increases, demonstrating the overall sector strength, Chernofsky said. 

  • Home Depot’s $41.1 billion in Q2 revenue represented more than 8% in growth, and the average purchase jumped 11.3%.
  • Lowe’s $27.6 billion in revenue was up from $27.3 billion in Q2 2020. 

Chernofsky said home improvement is shifting away from the DIY boom of last year. Home Depot is leaning on its professional contractor business, while Lowe’s is relying on home decor, per CEO Marvin Ellison.  

  • “We’re going to see the space start to operate more like it did in the past,” Chernofsky told us. 

Zoom out: Home improvement retailers are seeing an uptick in shoppers during the week compared to the Before Times, as customers return to social events and vacation on the weekends. In June and July, Home Depot and Lowe’s, respectively, have seen 3.5% and 3.6% bumps in weekday traffic compared to 2019, according to Placer.ai data.—KM

Janelle B. Smith

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