I used to work at HD earlier on in college, and still know many people in the business (like Bernie Marcus because he plays golf with the Pa-in-Law), many that defected to Lowe's when they came to town. I can give you a good rundown of both...
-HD makes its money on commodities... lumber, garden, plumbing, etc. They get better pricing for dealing in bulk. Lowes is geared towards the specialty sales bringing in the money. Flooring, Appliances, K&B... while their lumber and such is usually a bit more expensive than HD, and they dont sell as much... they dont intend to. See, HD either owns or is in big partnerships with many of the companies it orders from now... Georgia Pacific (HD's HQ is in Atlanta, they are 'in bed'), Andersen which also bought American Craftsman last month (exclusive contract), Thomasville (owned), Pegasus (a HD brand), Feather River (owned), Rigid Tools (supposed exclusive), Jeld Wen/ Masonite (in bed with), etc. Lowes doesnt get the deals on these goods, so it cant be as cheap, nor is it interested in selling as much of these items. But that does mean that it can order parts from wherever it wants. So rather than being strapped down with that one plumbing supplier like HD, and not carrying certain items because the distributor doesnt, Lowe's can get that SCH80 piping or 1" CPVC that HD cant. At that though, 95% of what you find at Lowe's can be found in a catalog at HD, with rare exception. Sure, Lowe's carries about 8-10 brands of Appliances (Frigidaire, Bosch, Whirlpool/Maytag, Fischer Paykel, etc), and HD has 3 (Maytag, GE, LG), but beyond that, its just a matter of what each company chooses to display. Lowe's has Kohler's full line of Vessel Sinks on display. They dont sell many in this market, but its 'eye candy'. They even have them, as well as exitoc European brands in stock, like Decolav and AXOR, but they dont sell many. HD doesnt show them as much... they show what they sell lots of, but you can look in the catalogs and find the full Decolav and Kohler, AXOR, etc. lines. HD people are all paid hourly, Lowe's are mosltly paid hourly, but the K&B, flooring, etc (specialty design) departments are not... they are all commission sales... to push those special order sales.
-In the long run, HD will win out. They can simply buy more at a lower price, or buy every supplier out there and cut Lowe's out from underneath. HD has been making a push in the 'at home' sales business market, and intends to appeal to more special order business. Lowe's doesnt have that kind of control... they are at the mercy of the mfg's that supply them, and these mfg's wont give them special deals or anything... companies like Pella which has its own stores and sells elsewhere, GE appliances (which is in bed with HD... the CEO comes from GE and negotiated a very sweet deal between GE and HD), Frigidaire, BOSCH, Whirlpool (they could all care less if Lowe's went under... they have Sears and others anyways), or Therma-Tru Doors (they dont say it, but they are owned by Andersen), or Kraftmaid Cabinetry (carried by and have more sold by HD)>>> they could all care less if Lowe's went under.
- It wont be long. HD had its burst of rapid expansion in the 80's and 90's... taking out others like Builder's Square and any Ma & Pa store in the process (ACE is still a favorite of mine for plumbing... they have what nobody else has). Its stock was awesome, and it looked like a great company from the outside. But from the inside, it was a wreck. It didnt even have an IT division, or a server farm, etc. It wasnt making any money either. It was staying alive by opening up new stores faster than it ran out of money... all borrowed money. Employees that were pushing carts might be getting paid $20 an hour, as there was no stnadard wages being practiced. I was taken in for over $20 an hour because I came from a commission job where my pay stub said I was making $25 an hour (that month, lol). When HD was looking at approaching market saturation about 2002, it knew it was in trouble. Thats why they hired Nardelli from GE. Bernie Marcus, co-founder and still board member (as well as builder of the Atlanta Aquarium and being a fish-nut like us), told me that if it wasnt for Nardelli, the company would have been gone by now. But Nardelli has pushed for contracts with other companies, exclusive selling rights and products, or even buying the distributor all together (I think this happens every few months that HD buys another company). See, Lowe's is still in the rapid expansion phase that HD was in 10 years ago. But they are coming to markets that already have HD's... whoopie for them. Once they get to a level of saturation like HD, and start to turn to other methods to increase their profit margins (like reducing hiring wages from the $3-4 on average increase that they offer HD employees to defect)... they are screwed because HD will have all the companies in their pocket.
