Handyman services save N.Y. dealer

Home Channel News, May 1, 2000 by R. Michelle Breyer

ROCHESTER, N.Y. -- Dave Meng knew Home Depot was coming to the Rochester market. But he didn't expect the Atlanta-based giant to plop down a huge home center within a mile of his 2,000-square-foot store, Penfield Hardware, four years ago. With a Chase-Pitkin Home and Garden super center located two miles in the other direction, Meng suddenly found his tiny outlet sandwiched between two mighty retailers.

It wasn't the most enviable position for an independent like Penfield Hardware. In fact, the ebb and flow of regional and national home centers coming into this market have led to a 54 percent drop in the number of smaller hardware stores here over the past 30 years, according to research conducted by the Rochester Democrat and Chronicle (see chart).

But Meng wasn't about to give up on his 90-year-old store. So he played to its strengths, focusing on a specialty that would set his store apart -- handyman services.

What started off as a survival tactic has turned into the fastest-growing segment of business for Penfield Hardware, whose revenue in 1999 rose 12 percent, and whose business in the first quarter of this year was up 50 percent compared to the same three months a year earlier. "We do what they don't do," said Meng about Penfield Hardware's niche vs. its two competitors. (Meng declined to disclose his sales in dollar amounts.)

Now Meng wants to take his formula for success on the road as a business consultant to teach other independents how to compete against the large home centers. "We've learned what works and what doesn't work," said Meng, who has owned this store for 21 years. "When you're stuck between two stores, you've got to learn to deal with them. You can't beat them."

Wedging in with a service niche

In their book "Up Against the Wal-Marts: How Your Business Can Prosper in the Shadow of the Retail Giants," authors Don Taylor and Jeanne Smalling Archer say a key to success is to carve out a niche where the retailer can outdeliver competitors. Penfield Hardware has done just that.

In a sense, Meng can credit his competitors for his current success.

Fifteen years ago, ChasePitkin -- the 15-unit, $210 million dealer that's based in Rochester and is owned by Wegman's, the area's dominant supermarket chain -- expanded its store nearest to Penfield Hardware to 90,000 square feet. At that point, Meng knew he had to change his focus or risk being trampled, heeding the advice he received at a seminar at a National Hardware Association meeting in Hawaii. The speaker told his audience to think of the big boxes as a river. "You can either be a fish swimming with them or you can be one of the ones floating upside down."

Penfield Hardware, which already provided services, expanded its locksmithing business. The store also provided glass and screen repair.

Meng said the store often got calls about services such as plumbing installations and electrical wiring. Rather than refer the work to other local tradesmen, five years ago Meng decided to seize the opportunity. "I said 'Why not do it myself?'" Meng asked.

Initially, Meng would go out on jobs while an employee stayed in the store. Over the past year and a half, however, demand has grown so quickly that Penfield Hardware now has four full-time and four part-time handymen. He plans to have six full-time handymen by the end of the year.

"It's really become a big part of our business," Meng said.

Penfield Hardware focuses on smaller jobs, such as changing washers on a faucet or fixing a toilet. A Penfield handyman even installed Christmas lights for a customer last season.

Most jobs take between one and three hours to complete. Bathroom remodeling projects are the most complex jobs Penfield Hardware will tackle. "We don't do kitchens; we don't do roofs," Meng said. "Our focus is on the handyman jobs."

The dealer charges a basic rate of $45 an hour, with some jobs, such as electrical, running $55 an hour.

Promoting humor

Although other hardware stores offer services such as blade sharpening or locksmithing, Meng said his is the only one he knows of with a staff of handymen.

To promote its handyman services, Penfield Hardware hands out brochures to each customer who walks through the door. He sends letters to new homeowners in the area and offers a house audit to real estate agents to tell them how to make a house more marketable, often getting repair jobs in the process.

The store also uses its large glass storefront windows -- one which is etched with a cartoon character, vaguely resembling Meng, who tells customers to "Ask Dave" -- as a billboard to attract the 20,000 cars that whiz by each day. The store has become well known for its humorous promotions. Last month, Penfield Hardware advertised its bathroom remodeling services with a picture of an outhouse and the phrase "Limited Seating?" A few days later, a list of the store's remodeling services was added to the window and the phone started ringing. Meng said in early April that his store already had four bathroom remodeling jobs confirmed and has bid on another four.