Next up for our retail index analyses is DIYers’ favorite category, Home Improvement and Home Goods. This sector performed well through the first three quarters of 2019 with two brands dominating at the top, Lowe’s and The Home Depot.
Did the leaders stay ahead during a powerful holiday period or did another brand claim a top spot? We analyzed the Q4 performance of 11 top retailers within the sector to find out.
Home Improvement Dominates
Home improvement giants, Lowe’s and Home Depot continued to dominate the category, generating nearly 60% of the market share for the group in Q4. HomeGoods and Menards came in a far-distant third and fourth place with 8.7% and 7.1% of the foot traffic share, respectively.
The massive gap between these brands and the rest of the sector speaks to the staying power of these two retailers, and their ongoing dominance within the sector.
A Boost From Home Goods
Overall, the sector performed well quarter-over-quarter, seeing a 7% average increase in traffic. However, that number is largely due in part to the impressive performance from CostPlus World Market. The home goods retailer saw a staggering 44% incline in traffic from Q3 to Q4, which speaks to the brand’s strong seasonality. In fact, three out of the four home goods stores analyzed saw increases quarter-over-quarter, with At Home claiming the second spot behind World Market with an 18% increase. Only IKEA saw a decline of 24%. Much of this centers around the significant seasonality that the sector sees, with a heavy focus on Home Improvement in Q2 followed by a surge for Home Goods around the holiday season.
So, despite quarterly growth, the category saw a decline of 1% in traffic when we look at year-over-year numbers. Only three of the 11 brands analyzed saw increases in traffic - At Home, Tractor Supply, and Home Depot. The low-performing Q4, shows us that the holiday time period doesn’t have such a strong pull across every category. However, if one of these brands can generate excitement and attract holiday shoppers, they may be better positioned for a sector takeover in 2020.
Home Improvement continues to lead the way with customer loyalty. Home Depot claims the top spot with 2.6 visits per quarter. Menards follows in a close second with nearly 2.5 and Lowe’s rounds out the top three with 2.3 visits. Although Lowe’s beats out Menards in the market share category, Menards wins out in customer loyalty, indicating that the retailer may be the best positioned to chip away at Lowe’s market share. The rest of the home improvement sector enjoys an average of 1.5 visits per quarter, about 1 full visit less than the top three’s average, further solidifying the strength of those three brands. HomeGoods takes the top spot for the decor category, with 1.7 visits. But, the competition isn’t far behind, as the remaining brands see an average of 1.5 visits per quarter, per customer.
Will 2020 be the year Menards closes the market share gap? Or will Lowe’s and Home Depot continue to dominate, while other brands are playing catch up?
Check back in with the Placer.ai blog to find out!