Maine dealer braces for warehouse incursion

Home Channel News, Oct 25, 1999

BELGRADE, MAINE -- Hammond Lumber, the six-unit retailer based here, extended its operating hours, changed its pricing strategy, upgraded its stores and unveiled a new showroom. The family owned company is banking on these changes to cushion the blow from the opening of two Home Depots within its markets by year's end.

Hammond Lumber until now has been largely untouched by warehouse competition. The closest big boxes are in Portland and Bangor, Maine, both considerable distances from Hammond's units in Southern and Central Maine. But this month, Home Depot is opening a store in Augusta, two miles from Hammond's headquarters. In December, another Home Depot will open for business within five miles of Hammond's store in Auburn.

But Hammond isn't sitting still. It fully intends to retain its consumer business, which represents half of its annual sales. Over the last few months, the company has invested in new siding and paint jobs to freshen up the Belgrade and Auburn stores. It has adopted hardlines distributor Emery-Water-house's everyday-low-price program to ensure competitive pricing. And after much internal debate, company officials decided to extend store hours in Belgrade and Auburn. Those locations are now open weekends, from 7 a.m. to 2 p.m. on Saturdays, and from 9 a.m. to 2 p.m. on Sundays.

"That was a difficult decision," Hammond's director of operations Robert Thing told NHCN, explaining that work-free weekends were always an effective recruiting tool. But Hammond employees still have evenings free; weekday closing time is 5 p.m.

On Oct. 23, the company unveiled another new project: a 9,600-square-foot kitchen, bath and flooring showroom on the second floor of its Auburn unit. The showroom will house more than 30 kitchen and bath vignettes and employ four dedicated salespeople. Marc Ducharme, branch manager at Auburn, said that half of the showroom's space previously served as storage; the other half was a millwork display area.

About 10 percent of Hammond Lumber's annual revenue, which last year totaled $47 million, is generated from kitchen and bath sales. Less than a year ago, flooring was introduced into Hammond's offering and has so far been "doing very well," according to Hammond officials.

Kitchen salesman Bill Nutting, who by himself sells seven to eight kitchens each week, said Hammond Lumber can compete successfully with Home Depot if it educates customers and makes sure they are "comparing apples to apples," not just shopping based on price. He emphasized that Hammond Lumber's services -- like computer-aided design, free estimating, free measuring and free house calls -- are unparalleled in its markets.

Even Hammond's latest television commercial anticipates Home Depot onslaught. The ad features three children playing with two cardboard boxes, the larger one labeled "Massive Big Box Place" and the other, "Little Box." The voice-over tells viewers that "big boxes aren't always better," and that little boxes just might contain nice surprises -- like the puppy that jumps out from the smaller box at the end of the commercial.