Home Centers & Hardware Stores
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 10,800 home center and hardware store companies in the US sell merchandise related to home repair, maintenance, and improvement. Hardware stores generally carry full lines of home repair and maintenance products, but may carry little to no lumber or building materials supplies. Home centers typically carry lumber and building materials in addition to traditional hardware. Companies may offer installation, project management, equipment rental, repair, or warranty services. Customers include DIY (do-it-yourself) customers, DIFM (do-it-for-me) customers, and commercial customers (builders, contractors).
Competition From Alternative Sources
Home centers and hardware stores compete with a variety of alternative sources, including building supply distributors; mass merchandisers; warehouse clubs; design centers and showrooms; and mail order and online retailers.
Complex Inventory Management
The sheer volume of individual stock keeping units (SKU) managed by home centers and hardware stores is staggering.
Industry size & Structure
The average home center employs 490 workers, and generates about $233 million annually, while the average hardware store employs about 15 workers and generates $4 million annually.
- The home center and hardware store industry consists of about 10,800 companies that employ about 898,000 workers and generate about $208 billion annually.
- The home center sector is highly concentrated; the four largest firms account for over 96% of sector sales. The hardware store sector is more fragmented; the 50 largest firms account for 41.5% of sales.
- Large companies include Home Depot, Lowes, and Menards. Thousands of hardware stores operate independently under purchasing cooperative brand names, such as Do It Best, Ace, and True Value.
Industry Forecast
Home Centers & Hardware Stores Industry Growth
Recent Developments
Mar 24, 2025 - Homeowners Pull Back on Remodeling Amid Tariff Jitters
- Tariffs, deportations, and high interest rates are giving some homeowners second thoughts about new home improvement projects, according to the Financial Times. In January, pending home sales hit an all-time low, according to The National Association of Realtors. Pending home sales are an indicator of remodeling demand as homeowners often fix up homes before putting them on the market, and buyers make improvements before moving in. In a recent earnings call, Home Depot’s CEO said that while the US’s aging housing stock is supportive of home improvement spending, an uptick in 2025 isn’t a given. The Trump administration’s deportation activities may also contribute to workforce instability in the construction sector, which may give some homeowners pause about starting major improvement projects.
- Some home builders are buying up extra lumber, fixtures, appliances, and other materials ahead of Trump administration tariffs, but the strategy could prove risky if high home prices keep buyers away, according to The Wall Street Journal. Some builders are pivoting to less expensive materials or reducing home sizes to offset the potential rise in materials costs brought on by tariffs. Industry observers suggest large home builders are better shielded from tariff-related uncertainty as their size gives them greater buying power to resist price hikes. However, smaller builders are more vulnerable. Building stockpiles of supplies presents risks for builders and distributors if demand dips and they are stuck holding unsold inventory. The National Association of Home Builders estimates that tariffs could increase the cost of building a single-family home by $7,500 to $10,000.
- Home builder confidence in the single-family market dropped in March 2025 amid mounting concerns about tariff threats, higher input costs, and economic uncertainty, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), dropped three points to 39 in March from 42 the previous month. Any HMI reading over 50 indicates that more builders see conditions as good than poor. While builders still face headwinds, including high materials costs being made worse by trade strife and labor and lot shortages, the industry is encouraged by the Trump administration’s emphasis on reducing regulations.
- Home remodeling spending is expected to see slight gains in 2025 after two years of weakening expenditures, according to the Leading Indicator of Remodeling Activity (LIRA) report released in January by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 0.4% to $513 billion in the first quarter of 2025 compared to Q1 2024. In the second quarter of 2025, remodeling spending will rise quarter-over-quarter to $505 billion, up 0.7% from Q2 2024. Spending will then increase to $506 billion in Q3 2025, up 1.2% from Q3 2024. In the fourth quarter of 2025, year-over-year spending is forecast to rise 1.2% to $509 billion. Joint Center expects improvements will be supported by rising home values, a steady labor market, and gradually improving sales of existing homes. Better retail sales of building materials and solid remodeling permitting activity should also support home improvement spending.
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