In this Placer Bytes, we dive into the performances of Home Depot and Lowe’s to see if two of the top retail performers during the COVID era continued their dominance into Q4 and early 2021.
Battle of the Home Improvement Titans
Since the onset of the pandemic, Home Depot and Lowe’s have been among the best retail performers. And late 2020 and January 2021 showed that this trend is still going strong. Visits for Home Depot were up 16.4%, 12.0%, and 22.2% respectively for November, December, and January year over year. Lowe’s saw even larger year-over-year increases with visits up 18.7%, 17.4%, and 30.4% respectively those same months. So, while most of retail was coping with declines driven by a resurgence of COVID cases, these home improvement leaders were again seeing huge year-over-year growth in visit numbers.
And the pattern held strong in 2021 with the weeks beginning January 4th, 11th, 18th, and 25th showing an average year-over-year increase of 20.9% for Home Depot and 28.3% for Lowe’s. This sets both brands up for a huge test in the coming months as monthly visits will be compared with the incredible surge they saw in 2020. Additionally, both are heading into their normal seasonal peak with spring just around the corner. So, while the brands could do exceptionally well even with minor year over year declines, the potential for reaching new heights is still present.
But did the pandemic shift the balance of power between these two leading brands? So far, it seems that the answer is yes, but only slightly. In January of 2020, Home Depot held 57.3% of the national visit share between the two brands, yet by April, Lowe’s actually had a slight lead holding 50.4% of the combined visits. And while this could have been a tipping point, it is more likely that the temporary shift was more related to the geographic distribution of stores between the two brands and the marketing tactics they were or were not using.
Home Depot quickly regained the visit share lead in May and by December had 55.9% of overall visits while seeing 55.7% in January 2021. Home Depot still has a significant lead on Lowe’s in terms of overall visits, but that gap does appear to be declining steadily over time.
However, this decline may not point to a fundamental issue for either brand as it could just mark a rapidly growing overall pie. This was strongly indicated by the fact that cross-shopping between the two brands increased significantly year over year. Looking at November through January, 3.0% more of Home Depot’s visitors were likely to visit a Lowe’s location than during the same period a year prior, while Lowe’s saw 4.7% more of its visits also stopping by a Home Depot location. And both brands saw big increases in cross-shopping with Tractor Supply as well.
The combination of increased visits overall alongside increased cross-shopping indicates that the surge for the sector is a tide lifting all boats. And while geographic distribution could have a major effect in the coming months - Home Depot has many more stores in hard-hit California than Lowe’s as an example - expect the wider trend to continue to provide wider benefits for the sector.
Will Home Depot and Lowe’s continue to thrive heading into their annual spring peak? Will the balance of power shift more as retail continues to recover? Visit Placer.ai to find out.