Where Home Center Warehouses Can Still Roam
Lowe’s, like most progressive companies in this industry, grew impressively through the booming 1990’s. This pace of growth actually increased through the early part of the new millennium. During this latter period, analysts began to wonder how many communities remained non-served or underserved by big boxes.
The big box retailers in question were not limited only to the likes of Lowe’s, Home Depot and Menard in this industry. The likes of Walmart, Kmart and Target also came into question. The contention here was that in order to properly support a big box, a community needed to offer a complex picture of demographic values. At the top of the list were a vast population and finances. Not far behind was the need for significant parcels of available and affordable land.
This land had to offer more than just enough space to accommodate at least 100,000 sq. ft. for a big box store. In the case of home center warehouses, significantly more space was required to accommodate the additions of a sizeable lumberyard, and outdoor plots from which to display all that can be offered in terms of lawn and garden, plants and flowers and all the devices employed to keep them healthy, including a growing variety of sizeable lawn mowers. Cumbersome outdoor power equipment and landscaping staples added to spatial requirements.
Of course, one can’t forget about the area needed for parking. In this industry, parking requirements are exacerbated by the grand vehicles employed by the professionals which the warehouse hopes to serve. Then too space is needed to accommodate large loading docks to serve professionals as well as consumers looking to cart-off ever more popular flooring, cabinets, furniture and major appliances.
With all this heavy commerce, professional clients and shoppers must have easy driving access to these destinations. Thus a plan for an efficiently, well-trafficked area must be taken into account.
When Lowe’s acquired Orchard Supply Hardware two years ago, the acquisition was seen as a likely answer to the expansion challenges of the home center warehouse community. Thus far, while Orchard, under Lowe’s guise, has embraced an impressive new 40,000 sq. ft. prototype and opened a few new locations, Orchard has yet to venture far outside its pre-Lowe’s territories in California and Oregon.
Last month Chain Store Guide ran an Insight in this space titled, A Unique Lowe’s Enters Manhattan, Twice. This piece profiled Lowe’s two newest locations, both in Manhattan. Coming in at 30,000 sq. ft. followed by a 38,000 sq. ft. location, these diminutive formats may well be the future, as Lowe’s hopes to open in prosperous communities which cannot adequately accommodate a true big box. Of course with real estate values in New York, these smaller Lowe’s formats become all the more desirable.
Recently Lowe’s won a bidding war. Thus the company won the right to acquire a dozen stores which had been abandoned when Target suddenly left Canada earlier this year. While this acquisition was certainly considered to be a bargain, these locations had been studied by Lowe’s and selected after their respective communities were deemed by the company as being underserved and in need of a store which traditional Lowe’s seek to offer. Thus in a moment, after careful study, Lowe’s found itself with its greatest single expansion in years. No matter that it was north of any border, Lowe’s is growing as it has long hoped to.
This expansion was well calculated as to respective community needs and potential. While purchasing the former Target locations, Lowe’s announced the purchase of two additional parcels in Canada to complete this round of expansion and truly prepare to serve across Canada, a mission Target was unable to complete.