New Stores Force Old To Find A Niche To Fill

When Eagle Hardware & Garden opened a store near Stewart Lumber Co. in Seattle, the profitable 60-year-old family business barely broke even the following year.

After Home Depot dropped in next door to All American Home Center in Downey, Calif., that 38-year-old company watched its net gain fall out of the double digits to only 6 percent for the next 12 months.

And when Jerry’s Home Center in Eugene, Ore., was forced to compete with both Home Base and Home Depot three years ago, it took the closure of one of those retail giants to get things back to normal.

“Home Base folded its tent about six months after Home Depot showed up, so that eased the competition somewhat,” said Brian Chesbro, director of operations at the 37-year-old Jerry’s store.

For Stewart Lumber Co., which now competes with both Eagle and Home Depot, chain store competition meant finding a new niche to fill.

“You can just go along for years until something like this hits you and then you realize, if you want to be around, you better make some wise choices,” owner Bill Young said.

“We decided who we really wanted to sell to and went after people in the commercial trade and the remodeling contractor who does high-end work.”

Jerry’s used its Ace Hardware affiliation to draw on market research, pricing strategies and volume discounts and plug sophisticated resources into “a well-run, traditional hardware store,” Chesbro said.

All American had no choice but to play the game by Home Depot’s rules, said Greg Fuller, chief operations officer for the 175,000-square-foot store.

“Home Depot found a spot they liked and moved right into our parking lot,” he said. “I mean, in our parking lot. You couldn’t get any closer.”

For every comparative shopper coming over from the new store, Fuller sent an employee in return. When Home Depot ran advertising saying it could beat All American’s prices, Fuller and his staff found a way to make it work for them.

“I’d rather have them right next door to us than a mile away,” Fuller said.

“We’ve opened up a new entrance facing Home Depot to facilitate customer traffic back-and-forth. I’ve got every single one of their prices in my computer. We put up an electric sign board facing the parking lot that advertises all the things Home Depot can’t do. We’re more than happy to poach customers from them.”

, DataTimes