Source : Business Times – 25 Aug 2009
In pre-recession days, home improvement projects were usually grand, expensive overhauls of kitchens and bathrooms.
In this economy, home improvement projects consist of painting the walls and replacing the jiggly toilet handle.
‘I’m not doing any major projects anymore,’ Steve Miller said as he shopped for putty knives last week at a Lowe’s in a suburb of Chicago, ‘but just fixing what I’ve got.’
For months, Mr Miller, 51, had been planning to give his kitchen and bathrooms a facelift. ‘Then the economy got bad, and I don’t want to run up any more credit,’ he said.
While the recession has caused consumers to pull the plug on exorbitant renovations, it has sparked a resurgence of small, do-it- yourself (DIY) repair and maintenance projects. The trend has been so noticeable at Lowe’s and Home Depot that those home-improvement chains are taking steps to adjust.
Lowe’s has added more staff to popular DIY departments, like paint and hardware. Home Depot also beefed up its paint department, adding new products like an all-in-one paint and primer, and a Rust-Oleum paint variety that promises to cover more surface area for the money.
Unwilling to part with their dollars for glossy new cabinets and granite countertops, consumers are buying only what they need to keep their homes in good condition: plumbing parts, paint, hardware, flooring.
And they are buying garden and lawn goods – fertiliser, birdseed, lawn mower and grill repair parts – for their backyards, where many penny-pinchers have spent their summer vacations. ‘We’re seeing a shift away from the professional to the do-it-yourself,’ said Michael Souers, a retailing analyst with Standard & Poor’s Equity Research. He added that the renovations consumers are putting off today ‘may be put off indefinitely’ because homeowners are unable to refinance or get credit lines secured by their home equity.
At Home Depot, participation in the company’s free weekly DIY workshops has spiked, particularly the sessions about tile, floors and paint. In May, registration for the chain’s quarterly ‘do-it-herself’ workshop for women who want to be handier was up 30 per cent compared with last year.
Home Depot does not track attendance at its weekly workshops, ‘but anecdotally we have consistently heard from stores that participation has been way up’, said spokeswoman Jean Niemi.
These days, shoppers are not only walking out of home improvement stores with free pointers; they are walking out after spending less than the cost of a pizza.
The other day, Phyllis LeDosquet, a professor in the education department of Northeastern Illinois University in Chicago, spent US$9 in a Lowe’s store.
‘I’m painting my kitchen myself and saving US$200,’ said Ms LeDosquet, 54, whose landlord asked her to paint her red walls white before moving out. ‘I also bought putty to fix the holes in the walls.’
This wave of frugality has, of course, hurt sales at the nation’s home improvement chains. In the second quarter, sales at stores open at least a year fell 8.5 per cent at Home Depot and 9.5 per cent at Lowe’s compared with the period a year ago. Sales of costlier merchandise (checkout tickets above US$900 at Home Depot, and above US$500 at Lowe’s) declined by double digits.
Even sales of home appliances are weak. Last Thursday, Sears Holdings reported that same-store sales at its Sears operations in the United States sank 12.5 per cent – much worse than analysts expected. The company said its results were hurt by lacklustre sales of appliances amid a terrible housing market.
Only two of the 20 product categories at Lowe’s – nursery items and paint – had sales increases in the second quarter. Larry D Stone, president and COO of Lowe’s, told investors in a conference call last week that nursery and paint were the two most popular DIY categories.
Craig Menear, Home Depot’s executive vice president for merchandising, expects the DIY to continue through the fall. ‘We are providing online tools to educate customers on the importance of weatherisation and simple projects like caulking,’ he told investors in a conference call last week, adding that Home Depot will offer ‘energy- and money-saving products along with fall project know-how’.
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