Home Depot is serious about building up its home appliance sales to a higher level and it's adding a second floor inside 25 older stores by mid-June to help it achieve its goal.
"We are growing in the appliance business, and the one direction you can go (to add store space) is up," Robert Baird, Home Depot divisional merchandising manager for appliances, told Reuters. Building a second floor, he said, "allows us to get 44 percent more units on display."
Deutsche Bank analyst Mike Baker said Home Depot has begun adding second floors because it operates older stores where Lowe's is building new and bigger units. Building up, he said, allows Home Depot to match the number of display models on the sales floor at Lowe's.
Lowe's and Home Depot are the number two and three retailers in the home appliance market. Sears Holdings is the leader but has watched its share slip to the DIY chains.
Appliances have been one of Home Depot's strengths, even as it has faltered in other building product categories. The chain increased its share of U.S. appliance sales from 9.3 percent in December 2005 to 11 percent last year.
Discussion Questions: What are Home Depot and Lowe's doing right in the home appliance business? How do you see the competitive picture shaping up?