QUARTERLY INDUSTRY UPDATE
Trend: Green Home Store Chain Finds Growth
A home supplies retailer that carries only environmentally friendly products has expanded its footprint and is expecting growth in 2013. Green Depot has 10 locations in the US and also sells its products online. Products in the stores have to meet strict criteria developed by engineers, are checked against a database of harmful chemicals, and are measured by factors such as energy efficiency. The New York-based company expects to increase revenues by nearly a quarter to $12 million in 2013 over 2012, according to BusinessWeek. Large competitors such as Home Depot discount smaller competitors such as Green Depot, saying the smaller companies can't compete on price for similar products. But Green Depot executives contend its stores have competitive prices and its staff provides better customer service with deeper product knowledge.
Building material dealers may want to highlight their inventory of environmentally friendly products to better compete for customers who desire greener products.
US consumer spending on durable goods, an indicator of building material supply sales to consumers, fell 1.7 percent in February 2013 compared to the same month in 2012.
The value of US residential construction spending, which impacts contractor demand for building material supplies, rose 19.2 percent year-to-date in February 2013 compared to the same period in 2012.
US retail sales for building material and garden equipment and supplies dealers, a potential measure of building material supply demand, increased 1.4 percent in the first three months of 2013 compared to the same period in 2012.
Total US wholesale sales of durable goods, a potential measure of demand for building material supply, fell 1.9 percent in February 2013 compared to the same month in 2012.
Companies in this industry are primarily engaged in retail sales of new building materials and supplies.
Major companies include Home Depot, Lowe's, and Menard (all based in the US) as well as Beijing Easyhome Investment Holding Group and Red Star Macalline International (both based in China), Home Improvement Hirose (Japan), Kingfisher plc (UK), and Praktiker and Tengelmann (both based in Germany).
Major products are lumber and other structural building materials and supplies (45 percent of sales) and hardware, tools, and plumbing and electrical supplies (25 percent of sales).
Typical customers are consumers and professionals such as contractors and tradesmen.
Revenue for many building material and supply dealers is highly seasonal, with demand greatest in summer.