Hardware volume expected to grow modestly in 1984

Discount Store News, Jan 9, 1984

Discount chain hardware departments are expected to hold their own and grow modestly in 1984.

Buyers project that department sales will grow an average 5%-10% this year. Most of them will keep their current space allocations, but most continue to fine-tune their product mixes. Ames, for example, is adding unpainted furniture and metal cabinets to its inventory. Others, like Zayre, have jumped on the imported bench tool band-wagon.

Categories like hand tools and security devices will continue to be steady though not dramatic sellers in 1984.

Buyers were less optimistic about the future of oil and kerosene-fired space heaters.

Weatherstripping and other energy-related products also aren't expected to sell as well in 1984 as they have in the past. According, to the buyers surveyed, this is due partly to the relaxation of oil prices, adverse publicity about the safety of kerosene space heaters, and a belief that people have become inured to the high price of oil.

Leo Crowley, hardware buyer at Zayre, declared:

"It's always difficult to predict the hardware business, but the most noticeable trend in 1983 was that hand tools and power tools were way up. We expect this to continue into 1984." He expects 10%-12% comparable-store sales growth in his department this year.

This Christmas Zayre added imported table saws and drill presses chainwide.

More Winners

At Connecticut-based Ames, imported drill presses and table saws were also big sellers.

Ames is planning to alter its hardware department. "In all of our stores, we're putting in three types of metal cabinets and unpainted KD desks, chairs and bureaus," said Alan Banks, dmm-hardware, automotives and trim-a-tree. "We've been selling unpainted chairs and they've moved very well."

As part of the chain's first entry into metal cabinets, Ames will offer a wardrobe, a waist-high storage cabinet and a kitchen cabinet with a butcher-block top.

Ames doesn't, however, plan to alter its hardware space allocations in 1984. "What we have to do is to work this new stuff in there and eliminate unprofitable items," said Banks. One area that may be cut to accommodate the new lines is cabinet hardware.

Increased competitive pressure from home centers is forcing other cutbacks. "We're also cutting out electrical ceiling fixtures because we can't compete with the home centers that also sell them," said Banks. "We'll just concentrate on light bulbs and electrical replacement goods."

Clover has taken a different approach to power tools. "We don't have the depth of product selection of a home center, so we'll stock [imported] power tools for key events like Father's Day and Christmas, when our female customers are likely to buy them as presents," said Charlie Hirschfeld, dmm-hard lines at Clover. "Since our stores cater to a basically female customers base, we stock the DIY lines that women are going to feel comfortable with, like paints, cabinet hardware and wallpaper squares," said Hirschfeld.

In basic categories, according to the buyers, hand tools have remained steady. But, some tools have saturated the marketplace so much that their prices have fallen.

"The hottest hand tool we had was the Track Master wrench set, but its price fell from $9.99 to $4.99 and the market became saturated," said Don Fields, hardware buyer at S.E. Nichols. "This is just like the 21-piece socket wrench set two or three years ago." Overall, Fields felt hand tools are a steady category.

One merchandise category that registered mixed responses among the chains was energy-related items, including kerosene heaters. "Because of the bad press with kerosene heaters this year, we've only sold 45% of what we sold a year ago," said Clover's Hirschfeld. "There's a glut on the market."

Nevertheless, he reported good sales on 7500 and 9500 radiant oil-filled portable radiators.

Another energy-related category that didn't do well last year was seasonal weather-stripping. "People have remodeled their homes over the past few years and have already insulated them and put in weatherstripping," said Ames' Banks.

Downturn Reported

"Also, now people have become used to paying $1.15 a gallon for heating oil, so they've just forgotten about insulating. Seasonal weatherstripping is down 25% and is our worst hardware category."

While most of the major discounters planned to maintain hardware departments in the same space this year as they did in 1983, some of the smaller chains predicted a contraction.

One such chain was J-Hawk, Waco, Tex., which recently combined its hardware and outdoor departments. "Our outdoor lines have burgeoned, so we decided to put all of our hardlines into one department," said Charles Brown, executive vp. "This seemed the thing to do, since our outdoor sales rose from $2.69 million in 1982 to $6.43 million in 1983."

Another small chain that planned to cut back its hardware department was Copps, Green Bay, Wis. "Our company's thinking has been less hardware and more soft goods," said Tom Denissen, hardware buyer at Copps. "We've always been a hard lines company, but we're all feeling the pinch in this area."