9/4/2023 0 Comments Home depot pricetrackerHome Depot offered expectations for flat sales and flat comparable sales growth for 2023, underpinned by three considerations: (1) The company expects flat economic growth and consumer spending in 2023. (As we have noted in the past, we believe Home Depot’s physical store visitation trends run moderately below reported transaction growth figures due to the inclusion of online transactions in the reported figures). Management anticipates that this will result in lower average ticket, but also improvement in the YoY transaction declines. For 2023, management expects inflation to remain a headwind, but also expects its pricing actions will be much lower than they had been the prior two years. Nevertheless, as the year progressed, management noted some deceleration in certain discretionary categories (particularly for single ticket discretionary items like appliances, grills, and patio). We saw consumers become more price sensitive as 2022 progressed across many categories, including grocery, restaurants, and others, although Home Depot management noted that home improvement shoppers were less price-sensitive “than what they would have expected” throughout 2022. State of the home improvement customer.This outlook strikes us as valid, but with the help of Placer.ai data, we also remain optimistic that home improvement retailers should be able to outperform historical visitation trends in the future. With that context, it may have come as a surprise that The Home Depot came out calling for a “year of moderation in demand for home improvement” on its Q4 2022 update this week, citing primarily an increase in price sensitivity among its consumers and the ongoing shift away from goods to services. 4M are sold in a given year and that 93% of those homeowners have fixed rate mortgages. homeowners would be more resilient to inflation and interest rate increases given that, out of the 130M homes in the U.S., only approx. In the past, we’ve discussed that home improvement is one of the retail categories that benefitted from a lift in structural demand coming out of the pandemic, with elevated housing prices, increased housing wear-and-tear due to work-from-home, and an aging housing stock prompting more home improvement projects.
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