Not sure if this was already posted, but I found it quite interesting:
http://www.businessweek.com/magazine/content/06_10/b3974001.htm
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Thats a lot of reading but it is a very good read . To entice more to read it Ill paste this portion which was the only part that was not semi boring and is directed at us .
One way Nardelli plans to kick-start the stock: move beyond the core U.S. big-box business and conquer new markets, from contractor supply to convenience stores to expansion into China. On Jan. 19, Home Depot announced plans to scale back the growth of new stores from more than 180 per year to about 100. The slowdown will let him plow extra resources into beefing up Home Depot Supply (HDS), a wholesale unit hawking pipes, custom kitchens, and building materials to contractors and repairmen. It's a fragmented market worth $410 billion per year, according to Home Depot, where Wal-Mart and Lowe's are AWOL and the only competitors are regional companies. Already, Nardelli has spent $4.1 billion buying 35 companies to bulk up HDS, and it plans to plunk down a further $3.5 billion to buy Orlando-based Hughes Supply Inc. (HUG ) By 2010, HDS sales are expected to reach $23 billion, accounting for 18% of Home Depot's total, up from 5% in 2005
So they are going to gear up at being a contractor store , hmm.
we will see
Tim
............supply to convenience stores to expansion into China.Going to start selling to thyemselves?
lol
Heard that Nardelli is not too happy with the latest acquistion of Hughes Supply. Stupid timing to buy a supply chain right when interst rates are going up
Interesting article (I read it from start to finish). Thanks for posting it.
I find it interesting that, despite all of the claims made in the article, the service at every HD I've been in over the last five years has been dismal, and the stores unkempt, disorganized, and unclean. The number of qualified and knowledgeable employees seems to have diminished markedly over the same period.
Their entrance into the service- and value-driven commercial supply arena should be interesting to watch; I have no reason to believe they are capable of delivering on a larger scale (to builders) when they haven't been able to deliver to consumers.
It sounds an awful lot like the implicit motto at HD these days might be "The beatings will continue until morale improves."
-Jazzdogg-
"Don't ask yourself what the world needs. Ask yourself what makes you come alive, and go do that, because what the world needs is people who have come alive." Gil Bailie
Good post and I mostly agree .
I sure havent noticed exellence anywhere with them so who did they pay to type this ? LOL. HOOPLA with capital letters. Show me .
However any attempt to gain our business would be more than it is now .
I saw a job that was to recruit sub contractors though in my local state paper for Home Depot . I also thought the subs though were to contract through them. It looked like a Lowes deal to me and as far as Im concerned Lowes is ahead of them in this area unlike what was stated as AWOL. Definately an untruth here. Lowes is kicking their azz doing it right now in my area.
Tim
Lowes is tearing them up here too...
with a PR deparment like that even you and I would look good...
A HO I know shopped at HD and there were sveral problems with HD's products I help remedy...
in the final the HO said...
"shopping at Home Depot is like sabotageing your own project"
He and his wife avoid HD even though there is one a few minutes away...
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!<!----><!---->
Forget the primal scream, just ROAR!!!
Edited 6/18/2006 3:26 pm by IMERC
I know there is a lot of crap threads on Lowes of people who dont like them but I often wonder if they have the set up I do.
They are 25 miles away and delevery to me is free on an AR account which is a business contractors account. They have a contractor sales desk where I get a healthy discount home owners cant . They dont ship for free to regular merchants. They will pick up too but I normally ship returns back on the next order. That gives the contractor an edge. No interrest on 30 days but if I want to float it longer I can put it on another account with them where theres no interrest for 6 mos. That sure beats construction loan interrest at the bank. Its one of the best hardware stores around for our kind of things . If you ask me HD has a lot of catching up to do. They wont even ship to me unless they bill it . Didnt take long to figgure out who to trade with and they beat the lumber yards daily on select items . Chain lumber yards too.
Tim
about the same set up here...Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!<!----><!---->
Forget the primal scream, just ROAR!!!
A friend of mine just contracted with HD for new roof. HD was 40 percent higher than the local contractors, but he was sold by the lifetime (labor and materials) warrantee. I suspect that this will result in a great profit to HD and less than great for the subcontractor. Being a giant, HD can self insure to cover the warrantee.
As for me, I'll go with the most reputable local guy I can find for a fair price.
I have pretty much given up on HD. My local yard is only slightly more expensive. They know me when I come in, the lumber is better, they support the community and they even gave my kid some scholarship money last year. The family that has owned it forever makes money, but not the disgusting sums that Nardelli requires.
"With every mistake we must surely be learning"
> .... but he was sold by the lifetime (labor and materials) warrantee.
Oy. That'll be worth approximately zippo if/when HD goes belly up.
I made the mistake of backordering some 4x8 Struct #1 ply from them. They had one lift, and it took them five weeks to get another.
So, the way to treat HD is like it was a gigantic ongoing garage sale:
1. Only go there if you have half a day to kill.
2. You'll wait most of an hour to check out, so to make it worthwhile, be prepared to stock up on lots of stuff. Maybe do a stock-up pass on HD every month or two.
3. Never never never order anything. If they have it at a good price, grab it. Otherwise, fuggedaboutit.
4. Never expect that anybody will know what anything is, let alone where it is. Figure on walking every aisle in the whole place. You may find what you need where some other customer took it off the cart.
5. Never call them on the phone. If you get an answer, it'll be wrong. When you get there, they won't have what they said they had.
-- J.S.
What he said.
Forrest
Just for followup:
The Home Depot roof job is done and it looks like crap. Worst flashing job I've ever seen. 40 percent more $$$ than the local guy and 40 percent of the craftsmanship.
BTW, the roofers are HD employed; they are not subs to HD.
"With every mistake we must surely be learning"
I recently did a cabinet install where the cabinets came from Home Depot. 4 townhomes, with kitchen, bath, and linen cabinets. Every single unit was screwed up in some way. Wrong color, wrong measurements, measurements mixed up, etc. Their sales rep came out and walked the job, then re-ordered. Everything he re-ordered was wrong. Finally the general told me to rebuild the cabinets to make it work, and just charge it as an extra.
Fortunately, I was able to use the finished face frames, with minor modifications, and install them over my custom built carcases. Believe me, it was a challenge to do it and make it look right. In two units, I had to actually remove a knee-wall that the cabinets butted up to, and just sheetrock the back of the cabinets (the original sales person measured to the outside of the wall, and drew it up with that measurement as the inside dimension). Not my decision, the general contractor made the call. Said he couldn't wait for HD to get it right.
To add insult to injury, the HD sales rep told the owners that they'd have less problems if they hired their installers, rather than me. So needless to say, HD is now on my poop list big time. Incompetent backstabbing morons. On a positive note, the owners did not buy into their "hire our installers" crap, and are considering legal action against them for the delays and extra costs."he...never charged nothing for his preaching, and it was worth it, too" - Mark Twain
For HD running their mouth, their bill for custom cabinet modification just went up a whole lot. Charge the crap out of them.
Can't you hear the violin playing your song.
Don't generalize your experience too much. I install for HD and have only had one messed up measurement in 40 jobs...but then again I do my own measurements. This is the kind of work I do for HD. I built this hood on-site for a HD job.
Good point. Not everyone who is self employed is a craftsman either. I just was following up on my earlier post about the higher priced HD quote not being the way I would go if it was up to me. I've seen that pic on BT before. No doubts about your craftsmanship.
I still think HD is all about funnelling cash to headquarters in Atlanta and less about quality.
I've had to fix or finish HD jobs done by other installers too...so they ain't all good. So I can't argue your point. I just attempt to show the other side too. There is some really good work done under the big box labels.Of course, I have a vested interest in defending one of the hands that feeds me. Truth be told, they annoy me more often than I want to admit.
--"BTW, the roofers are HD employed; they are not subs to HD."I am suprised by that statement...here (MN) all HD installers are subs and not even to HD, but to another business that contracts with HD. They might be employees of a separate company.
"I find it interesting that, despite all of the claims made in the article, the service at every HD I've been in over the last five years has been dismal, and the stores unkempt, disorganized, and unclean. The number of qualified and knowledgeable employees seems to have diminished markedly over the same period."The local HD has been like that for a long time.However, the last couple of times that I have been in they seem to be, at least on the surface, much more solicitous and asking if I need help.But I still avoid the store for Lowes as much as possible.
>>>...........at least on the surface, much more solicitous and asking if I need help.<<
They are getting bonusus based on feedback from the website.
>> I find it interesting that, despite all of the claims made in the article, the service at every HD I've been in over the last five years has been dismal, and the stores unkempt, disorganized, and unclean. The number of qualified and knowledgeable employees seems to have diminished markedly over the same period. <<
I was wondering the same thing. A facility that is >> unkempt, disorganized, and unclean. << doesn't seem like an outfit a military man would be running. They seem to have gotten really bad about having stock blocking the isles, so god help any poor customer who might have to push a lumber cart through there.
As far as >> The number of qualified and knowledgeable employees seems to have diminished markedly over the same period. << I don't expect much form these people who are being paid only somewhat more than minimum wage. I limit my requests for help to "do you know where the ____ is?" knowing that the person whom I'm asking might likely not even know what ______ is much less where it is. Granted there are a few knowledgeable employees. The paint dept help seems to be pretty good - maybe that's because I don't know squat about paint... :-)
Most interesting.. Unfortunately it think the HD CEO's best will end up being a failure long term. I'm just a average homeowner and I find myself going to Lowes and Menards 90% of the time even though HD is less than a mile from my house. It basically has to do with service and how messy the store has become.
I used to able to talk to a worker who more often than not, was a past plumnber, carpenter, or roofer, etc... they actually knew what they were talking about. Now that most of the stores have a majority of part-time workers who are high schoolers, housewives/househusbands, or worse yet, plain dangerous homeowners like me, only knowing what is written on the packages... I was at HD recently at 8:00pm and was looking for help in the hardware dept., three different workers told me "the hardware manager leaves at 6:00pm, you have to come back tomorrow when he is in for help" - even from the 'manager' at the contractors desk. I went to Lowes that night too...
On the cleanliness of the store - that's a joke. They've turned in to Builders Square in its final days. There are displays of stuff set up everywhere, in all the isles, that block access (in search of that extra "sales per square foot" number). The most annoying aspect of HD is that I usually have to push aside the rolling stair units because they always seem to blocking whatever I trying to get at. I wonder if the little factoid from the PBS show of a few years ago is still true: there was a point when one or two customers a week were getting killed in HD when something fell on them from the overhead storage (maybe they were trying to use the stair units to get something when the shouldn't have... )
So, with all of this, I find myself going to Lowes and Menard's most often now, the workers seen to try to help better - they are still the part-timers, but at least they give the appearance of caring. Plus the stores are infinitely cleaner, brighter and easier to move around in (without dozens extra display's blocking most every isle).
My guess is that in a few years we'll add HD to the Builder's Square list of formerly good companies.
Edited 6/18/2006 5:46 pm by mark14
Edited 6/18/2006 5:47 pm by mark14
I noticed how messy K-mart got shortly before they took bankruptcy a few years ago
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Hmmmmmmm.
Anybody thinkin' about short sellin' HD?
Forrest
Time to do that was around end of March. It's down about $6/share since then. But there's still a long way from $36 to $10-$15 or even ZERO!!
There was a local radio article yesterday about HD advertising for a piece of equipment (table saw, I believe) with a very good price on it. The small print said to call about availablity but not many people saw/read it. Many were going to local stores (2) and finding no saw. Upon calling head office, they found out that the saw was not available EAST OF MONTREAL!!!! That's about 1/4 of Canada. Great Service!!!
The freelance person doing the article ( a marketing/business professor) felt there was a reasonable chance of getting a conviction against them for false advertising if anyone wanted to go that far.
A bunch of soldiers starting to run the place........does not sound good for the company.
Edited 6/23/2006 8:27 am ET by experienced
I once worked for a company, which shall remain nameless, that was expanding vigorously like HD. They were "robbing Peter to pay Paul" by misdirecting expansion capital to cover operational shortfalls: had they stopped expanding, which would have shut off the capital funding, their cash-flow would have fallen into red ink in a very short time.
When I read the HD story I couldn't help but wonder if they, too, were co-mingling resources in order to stay solvent (the posting about shareholders being upset because of HD's refusal to share comparable sales only served to increase my suspicion).
Reading about the head honcho's compensation, guaranteed bonuses, and unmitigated hubris caused the alarm bells on my crap detector to ring vigorously: why is this guy receiving such exorbitant compensation when their stores are demonstrably sub-par?
-Jazzdogg-
"Don't ask yourself what the world needs. Ask yourself what makes you come alive, and go do that, because what the world needs is people who have come alive." Gil Bailie
I read on an investing site that the shareholders are in revolt against the board because the company refuses to release same store sales - an important metric standard of value in that industry
Welcome to the
Taunton University of Knowledge FHB Campus at Breaktime.
where ...
Excellence is its own reward!
In addition to over $100 Mill the top dog has pulled out over the past 5 years!
HD is an example of what can happen when the founders bring in a CEO with no clue about operating a retail business. The fact that Nardelli "left" GE should tell you something. GE doesn't keep deadwood in the executive offices.
I have to agree with other posters about the vibe I get when visiting our local HD. The indians seem restless, and not a lot of emphasis is placed on housekeeping or display management. By contrast the Lowes seems cleaner and better managed.
Edited 7/9/2006 11:50 pm ET by TJK
I agree with most that HD is a good place to go if you know what you want and you know where it is.
It isn't much cheaper than the local lumber yard.
I started my first spec home and decided to go with Menards. While I got approved for a 70K credit limit, I have found lots of help from them.
The only problem is that Menards is cheap and they have a problem working with their delivery people.
In a previous life, I was in Insurance and worked on their property and liability insurance accounts.
They go with what is cheap. If you can get to know those people who know what they are doing (they are there-somewhere), Menards is the best choice. Even by phone.
I'm guessing whether HD, Lowes or Menards, if you can get in with someone in charge, you can get what you want. Unfortunately, with these, we must ask.