Ava AbbottThe Home Depot is the world’s largest home improvement retailer based in Atlanta, Georgia. The company was founded in 1978 by Bernie Marcus and Arthur Blank. Today, Home Depot is the go-to one-stop-shop for DIY home repair and improvement products.
The retailer offers more than 40,000 items, including construction materials, powered tools, lawn and garden products, interior décor, and more.
Homeowners and contractors can access these products via Home Depot’s stores and warehouses across the US, Canada, and Mexico. For the fiscal year ended Feb 2021, Home Depot generated $132.11 billion in revenues. As of March 2021, the company had 2,312 stores and more than 500,000 employees. [1]
Home Depot operates big-box stores with an average of 104,000 feet. The retailer caters to three customer segments, professional contractors, Do-It-For-Me, and Do-It-Yourself homeowners.
In 2020, Home Depot launched its interconnected One Home Depot strategy and transformed its warehouses into fulfillment centers. This transformation enabled Home Depot to exploit the ever-increasing demand for home improvement as millions of people observed stay-at-home orders.
The retailer’s same-store sales rose 6.1% globally and 5.5% in the US in the first half of 2021. Overall sales rose nearly 10% in subsequent quarters from 2020 to 2021. Home Depot has to fend off stiff competition from Lowe’s, Menards, Walmart, and Amazon. [2]
Here is an in-depth analysis of top Home Depot’s competitors and alternatives:
1. Lowe’s
Year founded: 1946
Headquarter: Mooresville, North Carolina
Lowe’s is America’s second-largest home improvement retailer after Home Depot. The company offers construction products supplied by about 7,500 vendors worldwide. With over 300,000 employees and 14 million customers served per week, Lowe’s is a powerhouse in its own right. In fiscal 2021, the retailer’s revenue surged 24.19% to $89.6 billion.
Both Home Depot and Lowe’s offer a wide range of home improvement products. Lowe’s has 1,974 stores, about 300 less than Home Depot. In 2020, the average consumer expenditure at Lowe’s was $85.6 versus $74.3 for Home Depot.
According to National Retail Federation, Home Depot is ranked sixth, and Lowe’s is ninth in the top 100 American retailers. Both companies are among the world’s 20 most valuable brands, Home Depot ranked 3rd, and Lowe’s ranked 9th. Lowe’s is Home Depot’s top competitor and alternative for many reasons. [3]
2. Amazon
Year founded: 1994
Headquarter: Seattle, Washington
Amazon is the world’s leading eCommerce retailer and one of the Big Five tech companies. The company’s online marketplace offers a wide range of products, including construction materials and tools. For the full year of 2020, Amazon’s revenue increased 34% to $386 billion.
Amazon has rendered many physical stores obsolete, but not Home Depot. Most homeowners and contractors prefer to drive to the nearest Home Depot instead of waiting several days for Amazon to deliver.
The gotta-have-it-now nature of home improvement products can help Home Depot fend off Amazon’s encroachment on its business. Home Depot invested $11 billion to improve its buy-online-pick-up-in-store strategy. Amazon is the fiercest competitor facing Home Depot. [4]
3. True Value
Year founded: 1932
Headquarter: Chicago, Illinois
True Value is one of the world’s leading hardlines wholesalers. The company serves independent hardware retailers via 13 regional distribution centers and 4,500 stores in 60 countries. In 2020, True Value had more than 2,500 associates and generated $8 billion in revenues.
Both True Value and Home Depot offer construction products and tools. However, True Value is a wholesaler while Home Depot is a retailer. The company is the exclusive distributor of several home improvement products.
In Oct 2021, True Value signed a partnership agreement with GE Lighting. True Value will be the only channel distributor for all GE-branded lightbulbs and whole-home automation products effective Jan 1, 2022. With over 70 years in the sector, True Value is the most experienced Home Depot competitor. [5]
4. Ace Hardware
Year founded: 1924
Headquarter: Chicago, Illinois
Ace Hardware is the world’s largest retailer-owned hardware cooperative. With 5,300 stores in 70 countries, Ace Hardware has more than double Home Depot’s locations. The company has 6,900 employees, with global sales topping $20 billion.
Like Home Depot, Ace operates an extensive distribution network in the US. However, the retailer distributes its products and services globally. Ace opened 110 new stores by Aug 2021 and planned to open 60 locations by the end of the year.
According to JD Power 2021 study, Ace offers the highest customer satisfaction among home improvement retail stores. The retailer ranked No. 1 in staff and service, in-store experience, online experience, and merchandise for 14 out of the last 15 years. Ace Hardware is a formidable competitor for Home Depot. [6]
5. Walmart
Year founded: 1962
Headquarter: Bentonville, Arkansas
Walmart is a big-box department store and the largest brick-and-mortar retailer globally. The retailer has more than 11,000 stores and over 2.2 million employees across 27 countries worldwide. In the fiscal year of 2021, Walmart generated $559 billion in revenues.
Both Walmart and Home Depot offer home décor, furnishings, appliances, and tools. They both operate a cost-leadership strategy, leveraging supplier connections to provide higher discounts than competitors.
In 2021, Home Depot surpassed Walmart’s market cap for the first time. Although Home Depot has seen significant improvement, Walmart’s diversified inventory ensures sustainable growth in the long term. Walmart is a strong competitor for Home Depot. [7]
6. Menards
Year founded: 1958
Headquarter: Wisconsin
Menards is a retail chain that sells construction materials and home décor. This family-run company operates around 300 stores in 14 US states. In 2020, Menards had 45,000 employees and made $10 billion in revenues.
Menards’ inventory matches Home Depot across the board, from generators to powered tools and paint. The company uses the slogan “Save Big Money!” to entice budget-conscious consumers. But Menards has been targeted by an organized theft ring.
The group visit Menards stores disguised as customers before loading generators, chainsaws, and lawn equipment onto their getaway cars. These events undercut Menards’ competitive advantage over Home Depot. [8]
7. Target
Year founded: 1902
Headquarter: Minneapolis, Minnesota
Target is one of the world’s largest discount retailers. The retailer offers home improvement products, furniture, home appliances, and more. In fiscal 2021, Target had 1,868 stores and generated $78 billion in revenues.
The main competitive advantage for Target over Home Depot is its low-cost home improvement products. Customers can find high-quality powered tools at a lower cost than Home Depot. Both companies have been grappling with shortages in goods due to supply chain issues.
In Aug 2021, Target upped the number of goods in its inventory by 26% to ensure its customers have access to everything they need. Target is an innovative Home Depot competitor. [9]
8. Home Hardware
Year founded: 1964
Headquarter: St. Jacobs, Ontario, Canada
Home Hardware is a privately held Canadian home improvement retail company. With over 1,100 stores, Home Hardware is Canada’s leading dealer-owned hardware. In 2020, Home Hardware had about 2,100 employees with annual revenue of $4.85 billion.
Like Home Depot, Home Hardware offers lumber, building materials, décor, and furniture. But the retailer has a strong market presence in Canada.
In Jul 2021, the company launched the Home Hardware Return to Sport Matching Grant with FlipGive. This partnership will provide about $25,000 in grants to support youth sports teams across Canada. Home Hardware is one of the top Home Depot competitors in the Canadian market. [10]
9. Costco
Year founded: 1983
Headquarter: Issaquah, Washington
Costco is a members-only wholesale retailer. The wholesaler offers home improvement products, including furnishings, kitchenware, home appliances, and construction tools. In fiscal 2021, Costco’s annual revenue increased 17.7% to $192.05 billion.
Costco offers high-quality products at affordable prices through its 803 warehouses. The company recorded a 14% revenue growth versus 20% for Home Depot. But Home Depot is opening stores at a slower pace than Costco.
In 2020, Home Depot opened 5 new locations compared to 21 new Costco stores. The wholesale giant has a fast-growing eCommerce platform, but it seeks to expand its brick-and-mortar stores. With over 107 million active cardholders, Costco is a strong competitor for Home Depot. [11]
10. Best Buy
Year founded: 1966
Headquarter: Richfield, Minnesota
Best Buy is a consumer electronics retailer with 1779 stores in the US, Mexico, and Canada. The electronics specialist offers home appliances that rival Home Depot’s inventory. In fiscal 2021, Best Buy recorded an 8.3% surge in revenue to $47.26 billion.
According to Consumer Reports 2021, Best Buy is the 16th best national retail chain for buying home appliances. Lowe’s edged out Home Depot for 20th place on Consumer Reports’ list.
The main competitive advantage for Best Buy is its price match guarantees that ensure the customer gets the best deal. Best Buy is one of the best Home Depot alternatives for buying home appliances. [12]
11. At Home
Year founded: 1979
Headquarter: Plano, Texas
At Home is a home decor chain store with 225 stores in 40 states. The company operates 110,000-square-feet stores stocked with over 50,000 home décor items for every room, style, and budget. In 2021, At Home had 6,289 employees and generated $1.737 billion in revenues.
At Home competes with Home Depot in the home decoration space. Its stores offer everything the customer needs to decorate their homes, from furniture to mirrors, rugs, wall art, housewares, and seasonal decor.
In Mar 2021, At Home opened three new home décor stores. The company is more specialized in the decor sector than Home Depot. [13]
12. Kohl’s
Year founded: 1962
Headquarter: Menomonee Falls, Wisconsin
Kohl’s is a retail store that sells bedding, home furniture, and appliances. The company operates 1,158 stores in 49 states. In 2021, Kohl’s revenue increased by 20.12% to $15.96 billion.
Kohl’s has a growing e-commerce presence and a strong retail footprint and loyalty program. But the company has failed to maximize these assets.
The company’s shareholders recently proposed spinning off Kohl’s e-commerce division. This move will increase the value of the stand-alone business to $12.4 billion. Kohl’s is more experienced in the home appliances sector than Home Depot. [14]
13. Abt Electronics
Year founded: 1936
Headquarter: Glenview, Illinois
Abt Electronics is a retailer that sells home appliances, furniture, and consumer electronics. The retailer operates at a single location and through online sales channels. Currently, Abt has 3,443 employees and makes $400 million in revenues annually.
Abt has been awarded the top spot on the Consumer Reports’ best places to buy appliances for 11 years in a row. The retailer offers excellent customer service and delivers to 50 states, with free shipping on orders over $35. Abt is the best Home Depot alternative for home appliances. [15]
14. Sodimac Homecenter
Year founded: 1952
Headquarter: Santiago, Chile
Sodimac Homecenter is a home improvement chain store that offers construction materials and tools. The retailer employs 43,000 people and operates 257 stores. In 2020, Sodimac generated around $2 billion in annual revenues.
Sodimac Homecenter operates in Mexico, where Home Depot has six stores. The company opened its seventh store in the country in May 2021 and added two more in Q3 and Q4. The home improvement specialist now has more stores in Mexico than Home Depot. Sodimac Homecenter is Home Depot’s top competitor in Mexico. [16]
15. Nebraska Furniture Mart
Year founded: 1937
Headquarter: Omaha, Nebraska
Nebraska Furniture Mart (NFM) is North America’s largest home furnishing store. The company offers furniture, flooring, appliances, and electronics through its physical stores in Nebraska, Iowa, Kansas, and Texas.
NFM has only 5 locations. But the retailer delivers to all US states, except Alaska, Hawaii, and California. The company plans to open a second 500,000-square-foot store near Austin, with an attached 700,000-square-foot warehouse. According to a Consumer Reports survey, NFM is the 5th best retailer of home appliances in North America. [17]
References & more information
- Ho, K. (2021, Feb 23). Home Depot’s sales are up 25%, but Wall Street is worried about its post-Covid prospects. Quartz
- La Monica, P. (2021, Nov 16). America is in a never-ending housing boom. Home Depot is reaping the rewards. CNN Business
- SRD (2021, Nov 2). Home Depot and Lowe’s: global annual sales 2011-2020. Statista
- Tatevosian, P. (2021, Jul 1). Home Depot Has an Advantage Amazon Can’t Take Away. The Motley Fool
- True Value (2021, Oct 1). True Value Company and GE Lighting, a Savant Company Announce New Exclusive Partnership. Business Wire
- Wilson, M. (2021, Aug 26). Ace Hardware is on track to open more than 170 stores in 2021. The Chain Storage
- Guru Focus (2021, Nov 18). Home Depot vs. Walmart, Which Is the Better Investment? Yahoo Finance
- Mann, P. (2021, Nov 9). Thieves are walking out of Menards stores with expensive items without paying. Click on Detroit
- Shoulberg, W. (2021, Aug 25). What Walmart, Target, and Home Depot are trying for their Supply Chain Meltdowns. Forbes
- Home Hardware (2021, Jul 12). Home Hardware and FlipGive Launch Grant Program to Help Kids Get Back in the Game. Newswire
- Kalogeropoulos, D. (2021, Mar 21). Better Buy: Costco vs. Home Depot. The Motley Fool
- Barretta, A. (2021, Apr 30). The best places to buy appliances in 2021. Business Insider
- Marin, C. (2021, Mar 17). At Home Opens Three New Stores in March. Business Newswire
- D’Innocenzio, A. (2021, Dec 6). Activist investor pushes Kohl’s to sell or split e-commerce. ABC News
- Alison, B. (2021, Apr 30). The best places to buy appliances in 2021. Insider
- Redaccion (2021, May 31). Sodimac opens its seventh store in Mexico, plans another two this year. Notifix.info
- Halkias, M. (2021, Dec 10). Nebraska Furniture Mart will open a second giant store near Austin. Dallas News
- Featured Photo by Jacob Rice
Tell us what you think? Did you find this article interesting? Share your thoughts and experiences in the comments section below.
Kevin Johnson
Brianna Parker
Add comment