Flutterby™! : The Home Depot-ization of America 2008-10-20 14:50:20.402263+00

The Home Depot-ization of America

2008-10-20 14:50:20.402263+00 by Dan Lyke 3 comments

When it comes to home improvement, our big projects generally get started on the weekends. This is a bit of a problem, because none of the commercial places are open on the weekend. Saturday, this meant that I ended up paying extra at OSH and getting stuff that wasn't exactly what I wanted rather than going to the local irrigation supply place (which also has people who actually know their stuff). On the cedar lined closets, it meant going to Lowe's, where I bought a box of "stainless steel" square drive screws to help assemble things.

Unfortunately, those screws may as well have been made of wax, the square-drive bit tore out of several of them, they were utterly worthless.

So I've just made a fairly large screw assortment order from McFeely's in the hopes that their screws are actually usable. I'll report back as I incorporate them into various products, but that's a symptom of what I see as "Home Depot-ization", where the cheap crap drives out the good because the consumers and the low-balling contractors aren't willing to pay for decent stuff. I cringed when Biden mentioned "Home Depot" in the vice-presidential debate.

For some projects I just don't buy from the big box stores, the plywood waits 'til I can make a run to somewhere that has the good stuff in stock, but short of carrying inventory that I don't have the space for, I don't know how to solve this problem more generally. My local extremely friendly and helpful hardware store doesn't carry the high end stuff because, and I've had this discussion with them, they're dealing with the home-owner who needs a tool that'll last through the rest of the weekend, just so they can finish whatever they didn't plan ahead for.

Seems like an issue in general economics, anyone explored this?

Thankfully, the town I live in is too small to support a Lowe's or Home Depot. We have an Ace hardware nearby and a True Value near the lake that are both open on weekends. It's nice to be able to go there and buy 'real' materials for projects when I need them. Home Depot never seemed too bad, as long as you stayed away from the '5 gallon buck of screws for $5' deals which are more akin to wal-mart or k-mart blue light special types of deals.

Overall, I think wal-mart is an interesting store to bring up in this conversation as well. I can see more people wanting to buy cheaper things of lesser quality... much in the case of wal-mart. Hardware-ish stores will carry cheaper and lower quality items because they sell to people who are more concerned about cutting corners than correctly assembling a project. For the people who use this as a labor of love instead of 'flipping a house', they're willing to go an extra mile to find better materials. I assume this includes going to hardware stores, ordering screws through mail, or even stocking up on higher quality brands in their garage to keep from having to go to a place like Lowe's or Home Depot on the weekends. I personally think that it's a reflection of our current economy and consumer vs product that's infected all the other markets recently, from toys to dog food, low quality and potentially dangerous merchandise for less cash is more important than the end result of having safer and higher quality merchandise. Money is tight in a lot of families, the way stores compensate for this is by providing products as cheaply as possible while trying to maintain their own profit margins.

And having been a regular at the home depot in the past, I'd say less than 20% of their business is done by contractors, the other 80% of the people they're trying to keep from going to competing stores with lower prices. I don't blame contractors for the quality of products, but the average weekender consumer who just wants to kick out a few things from the honey-do list so he/she can watch the game in peace and not blow a wad of money doing it.

"At one point last week the Morgan Stanley $10.7bn pay pot [top executive bonuses] for the year to date was greater than the entire stock market value of the business. In effect, staff, on receiving their remuneration, could club together and buy the bank."

Home Depot has enjoyed its considerable success by cherry picking high volume product, and using its near monopsony power to bludgeon manufacturers to give it enormous price concessions. In fact, a full line electrical distributor ("small business", entrepreneur) can buy small home circuit breakers from Home Depot for less than he can buy them from the manufacturer

The effect that I've observed is that there is often insufficient profit in the high volume stuff for the specialty stores (like the old standard Ace) to survive in competition, especially since their costs for those goods are higher than the Home Depot's. (Don't look to Robinson-Patman, because the price differences are attributed to volume efficiencies, and get around R-P that way. The gov't has gone cryptorchid in dealing with restraint of trade issues.)

Another effect of the home depot is that, while heretofore commercial distributors, like Grainger, Mac & Mac, ... had trade prices and counter prices, strongly favoring the established tradesman, now any Poindexter with a truck can compete with the tradesman, who enjoys no material cost advantage over the gypsies. (With my apologies to the Romani) I offer this without judgment, since I supported my family for a while by "informal contracting".