Mahin Barker, who runs an Ace Hardware store in West Lake Hills, on the outskirts of Austin, Texas, notes the unique shopping habits of her customers. “Soccer moms come in nearly every day and they’re keen to shop,” Barker said. “They have a lot of time and disposable income to spend, so we have to keep our merchandise fresh because they’re here so often.”
The Ace Hardware Advantage
Ace Hardware, a 100-year-old chain based in Oak Brook, Illinois, has more than 5,000 locations across America’s smaller neighborhoods. Despite the challenges faced by big-box hardware giants like Home Depot and Lowe’s, Ace Hardware appears to be drawing in more shoppers.
Increased Customer Traffic
According to Placer.ai, which uses location data from mobile devices to estimate visits to specific retailer locations, monthly customer traffic to Ace Hardware stores has increased this year compared to last year. In contrast, Home Depot and Lowe’s have seen a decline in shopper traffic over the same period.
Sales Performance
Recent quarterly sales reports show a clear distinction between Ace Hardware and its larger competitors. Home Depot reported a 3.2% decline in same-store sales in the US, while Lowe’s experienced a 4.1% drop. Both companies attributed the declines to reduced spending on home renovations and discretionary purchases. Meanwhile, Ace Hardware reported a small increase in US same-store sales and a 1.1% rise in the average amount spent per store trip. The company’s total revenue systemwide rose by 2.5%, and it plans to open 200 new stores in 2024.
Small and Mighty Stores
Ace Hardware’s smaller store format, averaging 7,000 to 10,000 square feet, and its community-centric locations have resonated with today’s consumers. Each store carries about 25,000 to 30,000 unique products, catering to the needs of local customers.
In contrast, Home Depot and Lowe’s cater more to contractors and homeowners undertaking large remodeling projects. As these big renovation projects have slowed, the larger hardware stores have seen sales declines. Ace Hardware benefits from the trend towards smaller, fix-it projects.
Diverse Product Offerings
Barker, who owns five Breed & Co Ace Hardware locations in the Austin area, emphasizes the importance of offering unexpected items alongside typical hardware products. In addition to screws, drill bits, and hammers, Barker’s stores offer garden products, housewares, and even a wedding registry.
“We noticed that a lot of brides don’t necessarily want to get what Aunt May buys for them,” Barker said. Engaged couples sometimes prefer items like a grill or plants, so her stores have enhanced their housewares section to include popular items like Le Creuset pots and pans, Nest candles, baby products, and even jewelry.
A Retail Cooperative
Founded in 1924 by four Chicago hardware store owners, Ace Hardware operates as a retail-owned cooperative. Only 4% of its more than 6,000 worldwide stores are company-owned. This structure allows individual store operators to be part owners, making them independent entrepreneurs. “They are essentially shareholders; they own the brand and the company,” said Kim Lefko, Ace Hardware’s chief marketing officer.
Store owners can order and stock national brands and private label products in bulk at lower prices directly from Ace Hardware’s warehouses. They also have the flexibility to curate about 20% of their merchandise to suit local tastes and needs by ordering directly from other vendors.
Conclusion
Ace Hardware’s community-focused approach, smaller store format, and diverse product offerings have enabled it to thrive where larger competitors struggle. As it continues to grow and adapt, Ace Hardware remains a beloved neighborhood fixture and a formidable player in the hardware industry.