Our visitation data suggests that the home improvement retail category has undergone a structural change the past several years, with non-traditional factors like increased wear and tear as more consumers work and school-from-home helping to drive increased demand. As such, it’s not surprising that Ace Hardware – which operates 5,600 locally-owned stores across all 50 states and more than 65 countries – announced this week that it has already opened 130 new stores in 2022 and plans to open an additional 40 locations to bring its 2022 store opening count to 170 locations.
- We’ve discussed that Pro demand is driving contributing to visit trends for Home Depot and Lowe’s, even with visitation trends down YoY as these chains lap two years of strong consumer demand. Nevertheless, Ace Hardware has flown under the radar screen, and has been one of the pleasant surprises in the home improvement retail category. While Ace Hardware’s visitation trends are down on a YoY basis, they’ve outperformed the home improvement retail category this year (below), which we attribute to its localized merchandising approach combined with Pro customer demand and other factors driving demand among the big box home improvement retail chains.
- Ace did not announce store opening plans for next year but based on current visitation trends and continued consumer demand to spend on their homes (93% of homeowners are locked into fixed rate mortgages according to Home Depot CFO Richard McPhail, which offers some insulation from rising interest rates), we expect that the number of openings in 2023 will look similar to 2022.