Home Depot Will Open Four New Distribution Centers

16 mar

Home Depot (HD) said Thursday it will open four new distribution centers as it drives more sales from remodelers, contractors and other home professionals.

The new distribution centers are expected to open in the first half of the year in Detroit, Los Angeles, San Antonio and Toronto. They make room for the bulky size, wider variety and larger orders of products that pros need, such as lumber, shingles and insulation, which then can be delivered directly to a job site.

Each facility averages approximately 500,000 square feet — about five times the size of the average Home Depot store.

Home Depot (HD) has opened 14 similar distribution hubs to serve pros in major metropolitan areas, starting with the first that it opened in Dallas in 2020.

Home Depot (HD) draws roughly half of its total sales from pros and the other half from do-it-yourself customers, such as homeowners tackling a painting project.


Home Depot’s sales declined by 3% in the last fiscal year as customers took on fewer projects after the pandemic. The company said it expects total sales to grow about 1% this fiscal year, including the lift from an additional week. It anticipates comparable sales, which take out the impact of store openings and closures, to fall about 1%, not including the extra week.

Beating those lackluster expectations could depend on pro customers, who are usually steadier and bigger spenders compared with DIY customers, said Chip Devine, Home Depot’s senior vice president of outside sales, who oversees the company’s pro business. They also need more specialized salespeople and services, which means they’re less likely to jump between retailers or switch to a competitor.



Home Depot (HD) have made fewer discretionary purchases and tackled smaller home projects in recent quarters. Big-ticket transactions, or those with a price tag of more than $1,000, fell by nearly 7% in the fourth quarter compared with the year-ago period, the company said on its earnings call last month.

Home Depot (HD) is poised to change other aspects of its business to support pros who handle complex and pricey projects. It is piloting a program that offers trade credit to pros, which means that Home Depot underwrites a large order and does not charge the pro customer until it is delivered — a standard that’s common in the industry, Devine said.

Home Depot (HD) also expanded its dedicated sales force for pros. And it has added digital and personalized features for pros, such as tools that help manage complicated orders and a loyalty program that offers perks.