Where do you shop for home improvement projects? For many Americans, increasingly, the answer is Lowe’s (NYSE: LOW). Home Depot (NYSE: HD), a Dow Jones Industrial Average component and the largest U.S. home improvement retailer, benefited enormously from the recent positive trends in home improvement. But competitor Lowe’s did even better, and is right on its heels for the top spot. Can Home Depot keep its lead, or is it in danger of being overtaken by Lowe’s?
Why Home Depot needs to worry
Home Depot has been the leading home improvement chain for decades, being the first to create and expand its big box stores across the U.S. Annual sales came in at more than $110 billion in 2019, a 2% increase over the prior year. The company is admired as solution-driven and agile, and as it helps people across the country with do-it-yourself building projects, sales continue to grow.
Lowe’s is smaller than Home Depot in both store count and sales, and was struggling before Marvin Ellison joined as CEO in 2018. He set a plan to turn the company around, and it’s starting to take shape.
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As recently as February of this year, Lowe’s had an inadequate digital program, running way behind Home Depot, and almost all of its growth came from stores. But that gave the company great leverage, because as soon as it invested in a digital overhaul, sales exploded. The second quarter’s huge increase was powered by a 135% digital spike.
Lowe’s is making all sorts of improvements through its retail fundamental strategy. It revamped its website and mobile app, and moved over to the cloud. During the next year and a half, it’s planning to open a large number of distribution and fulfillment centers. It recently launched a