Home Depot Increases Focus on Construction and Renovation Market with New Investments in the Supply Chain, Targeting Professional Craftsmen and Contractors Specifically
The company plans to add four more distribution centers to its network of 14 warehouses this year, which are specifically targeted at professionals. These new locations will focus on bulky building materials such as lumber, insulation, and roofing shingles, which are in high demand among contractors.
Chip Devine, Senior Vice President of Outside Sales at Home Depot, explained that the Atlanta-based company is bundling similar products in its warehouses to process them in large quantities. This lowers costs and speeds up order fulfillment. Currently, sales to the professional market segment account for about 48% of Home Depot's total sales. The company aims to handle bulky items more efficiently in order to offer lower prices to its professional customers.
The new warehouses in Detroit, San Antonio, Los Angeles, and Toronto expand the existing network of so-called flatbed distribution centers of the retailer, which are used for storing bulky goods. Home Depot also fulfills orders from retail buyers for these items from these warehouses. For these flatbed distribution centers, Home Depot is looking for larger areas adjacent to railroad lines so that the company can receive building materials directly from the suppliers. Previously, orders for items such as beams, drywall, and shingles were fulfilled from the stores, which clogged the aisles and tied up store employees who could otherwise be available to retail buyers.
Despite Challenges from Falling Sales Last Year Due to High Interest Rates and Low Property Turnover, Home Depot Continues to Focus on Growth in the Professional Segment. The Company's Comparable Sales Fell by 3.5% in the Quarter Ending January 28 Compared to the Previous Year. Home Depot Has Also Made Acquisitions to Expand Its Outreach Among Professionals, Including the Purchase of Construction Resources and HD Supply Holdings.
These Strategic Moves Highlight Home Depot's Commitment to Serving and Expanding Its Presence in the Professional Market Segment, Despite Current Economic and Real Estate Challenges.
