The big three

The balance of power in the American home improvement sector has remained more or less the same for years. There have been only a few minor changes in the last year.
Home Depot, the world's largest home improvement retailer, has slowed and almost stopped its new-store growth, while Lowe's, number two in America and the world, is continuing to open some new units, although its expansion pace has materially slowed compared with the past.
Both companies apparently believe that most markets are fairly well represented. Home Depot has been focusing its efforts on better serving professional customers and going after online sales.
The more inte­resting change in the marketplace is the development of Menards, the privately-owned number three chain, which has an estimated USD 9+ billion in sales. Menards is now estimated to have around 300 stores in America's Midwest, and continues to open a few stores each year.
The biggest change for the company, however, has been its programme to expand more and more stores into units of around 20 000 m², which makes them double the size of a typical Home Depot or Lowe's.
Menards stores do not resemble the warehouse format of its two big competitors; they are cleaner, brighter and more conventional-looking than the other two. It has also been expanding its inventory by adding many non-conventional products and now carries a range of food and grocery-store products as well as a limited line of work and recreational clothing.

The other interesting difference between the three chains is that Menards is by far the most active and aggressive advertiser, running a multi-page weekly circular, whereas Home Depot and Lowe's run such promotions monthly or less often. Menards now claims that it "guarantees" to have the lowest prices.
Menards has also hit upon a unique promotional idea - offering an 11 per cent rebate on a great many items, but consumers are required to mail in their sales receipts to get the discount, which can then be applied to a future purchase. This is actually a clever idea that does not cost the company anywhere near the proffered 11 per cent. Why? Simply because many customers will not bother to write in for the rebate, especially if their purchases were minor in value. It simply would not be worthwhile but the mental image…