2 minute read
Hardware business changing
By Otto Grigg Managing Director Pacific Southwest Hardware Association
IFHE atmos- I phere for 1983 will change, but the opportunities for retail hardware/home center opera- tions will increase.
Managementwill be confronted with a variety of new factors if they desire higher profits. Guide lines learned from management studies will become most important in formulating plans. Home centers will find the figures of sales-per-personemployed a firm basis for operation. Sales-per-customer averages offer goals to be attained on the sales floor. Sales-per-square-foot of sales space will become even more important in attaining the maximum of return from existing sales space. This plus stock turnsbecomes the guiding line for success at the register.
Knowledge of the customer audience and the community will be vital to inventory mix. Knowing the actual dollar spending value of your shopping area will be an advantage that overcomes competition that is not
Sfory at a Glance
Continued good hardware business . . growth dependent upon management exPer. tise tighter controls more vital than ever . . . increased usc ol varied sales techniques.
willing to utilize "motivation studies for profit."
Personnel training is another valuable contributor to the Bottom Line. Use of training taPes, and training sessions to merchandise the advertising, and other in-store programs can add increased store sales. The ability of management to Provide information and instruction that develop sales potential will be critical. Management can also increase sales floor activity by better related merchandising procedures. Better store layout will combine related items, rather than group them in their basic logical department. Better use of existing displaYs bY using extended panels and uprights increases their effectiveness. This can garner additional square feet of display area without changing the base of the display unit. In all of these steps, though, the dealer must first consider how the consumer will respond.
The consumer is more cautious, more needy of advice and leadership. Today's consumer will use credit cards with more caution and more
Single-family starts should rebound smartly, but multi-family housing's market share should remain at about370/o,compared to just 3090 in 1979. (More than two-thirds of those multi-family starts will be condominiums.)
In 1983 the West will account for nearly one-quarter of the nation's nonresidential building, up from just one-fifth in 1975.
Expenditures for repairs and alterations may be flat in 1983, but we think they will outperform housing this decade. In l98l Georgia-Pacific customers sold more product to doit-yourselfers and commercial remodelers than to builders for the first time in our company's historyan experience we may have repeated in 1982.
The rising cost of new construction and high mortgage rates are great incentives to remodel or rehabilitate existing structures-particularly the 30 million tract houses built in the two decades after World War II. Higher transportation costs and changing life-styles are making older, close-in neighborhoods more attractive, a trend we think will become more pronounced throughout the '80s.
Manufactured housing may improve to 275,0U in 1983, with much of the recovery occurring in the West. often pay in cash for projects.
Dealers will discover paint departments will require more actual sales space to adequately service the customers. Paint department employees will need to be sharper on color application and color mix as customers follow decorator advice. Other departments can produce more sales than in the past. Automotive is a good illustration. As consumers discover their mechanical ability they will tend to do more maintenance procedures to save money.
Plumbing will continue to do well. But with more diversified projects, in-store selling and instructional tapes merit consideration.
All of this points to the continuation of good basic business in the retail hardware/home center business for 1983. But not without controlled finances. Cash flow will continue to affect extended operation and must be considered by management.
A 9% to I I qo growth factor is possible with top producers easily hitting 129e.
