How home depot makes money

August 1, In fact, the price has almost quadrupled over the past five years. All rights reserved. Georgia College and State University. September 11, The venue is now called Dignity Health Sports Park. That success has contributed to a stunning increase in profitability.

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The home-improvement giant is enjoying strong growth despite a flat store base.

It’s also a cash-printing machine. Below, we’ll look at the major sources of that market-leading profit growth. Most retailers count on an expanding store footprint to deliver a key portion of their sales gains. Not Home Depot, though. The company has added just one warehouse in the core U.

Extra spending at stores

It’s also a cash-printing machine. Below, we’ll look at the major sources of that market-leading profit growth. Most retailers count on an expanding store footprint to deliver a key portion of their sales gains.

Not Home Depot. The company has added just one warehouse in the core U. The flat selling base puts all the pressure on existing locations to deliver revenue and how home depot makes money growth. Yet Home Depot hasn’t struggled at all in this area.

A slowdown in customer traffic growth is a caution sign that’s just starting to show in recent results. Home Depot has so far made up for that slump by boosting its average spending. Still, long-term gains will be harder to achieve if traffic keeps flattening or dips into negative territory.

Home Depot enjoys a dominant market position in the consumer side of the home-improvement industry that’s comprised of homeowners who complete their own projects or pay the retailer for help with installation.

Its biggest growth wins lately have been in targeting professional renovators. Home Depot caters to this base through initiatives like a special loyalty program, attractive credit terms, and dedicated sales and service staff — and through major acquisitions like its Interline Brands purchase in The extra care is paying solid dividends to the business.

Pro-heavy sales categories like lumber and commercial lighting routinely outpace the company average. Professional shoppers are helping pick up the slack caused by a slowing overall customer traffic pace. Home Depot has a sharply different approach to its business than the positioning of major value-based retailers like Costco. While the warehouse giant prides itself on delivering the lowest possible price for its customers, Home Depot instead prioritizes on what it calls «product authority,» which means it aims to attract customers using a unique inventory that includes innovative, and often exclusive, products and brands.

By focusing on these kinds of products, Home Depot gains space to charge higher prices and deliver more technical installation services. That success has contributed to a stunning increase in profitability.

There are big risks to the company reaching those aggressive targets, including a housing industry retreat or a further slowdown in customer traffic. Yet Home Depot is currently on track to post another year of significantly improved market share, profitability, and cash returns to shareholders in Aug 12, at AM. Author Bio Demitri covers consumer goods and media companies for Fool.

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The home-improvement giant is enjoying strong growth despite a flat store base.

Of ,akes total revenues, Home Depot generated. Retrieved January 1, Its biggest growth wins lately have been in targeting professional renovators. Upping its in-store customer service game is the primary focus in achieving this goal. The Atlanta Journal-Constitution. Hardware stores, lumberyards and paint dealers were as small, independent and local as how home depot makes money shops. In other projects Wikimedia Commons. In and mames, with the downturn in the housing market, The Home Depot announced the layoff of several miney associates, as well as the closing of 54 stores nationwide, including the entire EXPO Design Center chain. The Home Depot. SHW does, a company that does almost nothing. Convenience Store News. Retrieved August 22, Seven people were killed in the front of the store when the ,pound walls collapsed on them, while 28 people in the back of the store survived when those walls collapsed outward.