Hardware Retailing

FEB 2019

Hardware Retailing magazine is the pre-eminent how-to management magazine for small business owners and managers in the home improvement retailing industry.

Issue link: http://www.hardwareretailingarchive.com/i/1074585

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Page 79 of 102

February 2019 | HARDWARE RETAILING 73 Competing and Growing The conference began with data and analysis of the economic environment in which independent retailers are working to thrive. Weather, tariffs and challenges in finding skilled labor all had an impact on the home improvement industry in 2018. However, retail overall still expanded, according to Dan Tratensek, executive vice president of NRHA and Hardware Retailing magazine publisher. "Retail saw modest growth, with relatively strong growth for home improvement retailers," Tratensek says. "No one has a crystal ball, but we project the home improvement sector will outpace general retail in 2019." NRHA's survey asked retailers what their single biggest competitor is and—for the first time in the history of NRHA's research—the most respondents ranked Amazon at No. 1. "Independent retailers have found out how to compete with the big boxes," Tratensek says. "Now, they're all asking, how do we respond to this online threat?" Jim Robisch, senior partner with market research and consulting firm The Farnsworth Group, noted that small businesses continue to be strong contributors to the U.S. economy, driving much of the job growth seen in recent years. "Small businesses continue to hire," Robisch says. The economic outlook for the near future looks good for home improvement, though there might be a softening in 2020 and beyond due to rising interest rates, housing affordability, worker shortages, trade tensions and other factors, he says. According to Robisch, the remodeling market is particularly strong. This strength benefits industry retailers because while some people may not be buying new homes, many are investing in upgrading their current living spaces, he says. "Remodeling is on fire," he says. "We're very, very positive and bullish on remodeling." " Independent retailers have found out how to compete with the big boxes. Now, they're all asking, how do we respond to this online threat? " —Dan Tratensek, NRHA 73 February 2019 | HARDWARE RETAILING Independent store operators answered survey questions about current and expected growth. Retailers Expect to Keep Growing 64.2% Do you plan on adding new product lines in the coming year? Do you plan on expanding existing product lines in the coming year? Yes No Yes No 88.4% Source: NRHA 2018 State of Independents Conference Research Which core categories do you feel have the biggest potential for growth? Retailers could select more than one answer. % of Survey Respondents 0% 10% 20% 30% 40% 50% Lawn & Garden Paint & Sundries Outdoor Living Plumbing Building Materials 48.6% 42.2% 27.8% 27.2% 22.0%

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