Retailers, consumers and prices
The Do-It-Yourself Lift
Home Depot said it is gearing up for spring with a wide assortment of lawn equipment and fertilizer products, looking to cash in should consumers cancel their contracts with professional landscaping companies.
The company said some consumers in cold-weather climates bought snowblowers in the fourth quarter, opting to clean their own driveways and save money instead of calling on snow-removal services.
“We wonder if that might not happen in the spring in the garden business,” Chief Financial Officer Carol Tome said in an interview. “If that were to happen, we’ll be ready with a broad assortment.”
Home Depot, which posted better than expected results for the fourth quarter adjusted for charges on Tuesday, gave insights on how its consumers are spending. During the fourth quarter, it said purchases of $500 or more fell in double-digit percentages. But average purchases of less than $20 fell only about 3 percent, suggesting consumers are still spending on basic home repairs.
“Consumers in general are being pretty careful,” Tome said. “We’ve seen savings rates increasing so that will impact consumer spending, too.”
While the rate of sales declines in hard-hit housing markets such as California and Florida has eased, Home Depot is not yet ready to say weakness in those states has hit bottom. Now, malaise has spread to areas that used to be more solid. For example, sales in the Ohio Valley and Pacific Northwest have softened considerably, Tome said.
One area where sales are rising is the U.S. Gulf Coast, where residents continue to rebuild after devastating hurricanes.
Home Depot also noted strong sales in vinyl flooring, roll carpet and cleaning, types of products that tend to go in homes that are being rented.