Home Depot, Lowe's broaden holiday stock

Building materials aren't necessarily hot items for the holidays.
RALEIGH NEWS & amp; OBSERVER
QUESTION: Which item can you find at your local home improvement chain?
A. Five-drawer wicker storage tower
B. Mantel clock
C. 50-inch plasma TV
D. Drill bits
E. All of the above.
If you answered "E," go to the head of the line.
This holiday season, Home Depot and Lowe's are once again stocking their shelves with an array of gift items that have nothing to do with the traditional notions of home improvement. But this year, both are pushing far more big-ticket items, including electronics, new services and lots of first-time items.
For both retail giants, the stakes are high. Last week, Atlanta-based Home Depot reported a 3 percent decline in its third-quarter profit, which was due mostly to declines in the sale of home building materials. The company also lowered its financial forecast for the year.
This week Lowe's said its same-store, year-over-year sales had declined 4 percent in the third quarter. The company also said that its fourth-quarter results would be less than Wall Street estimates.
With the national housing market slumping, the companies need to find sales outside of their traditional home building materials, retail analysts said.
The cross-marketing strategy being used by Home Depot and Lowe's has been employed by a number of retailers in the past few years, said Scott B. Krugman, spokesman for National Retail Federation. For example, some grocery stores now sell clothes, while some discount stores have added upscale merchandise.
With competition so fierce, businesses expand beyond their core products to keep people in their stores longer.
Retailers "can't be afraid to change their offerings to stay relevant," Krugman said.
Making room
Home Depot, which jump-started the holiday season in early October, has doubled its space for holiday-gift products and added 100 new items, spokeswoman Sheriee Bowman said.
Many of those products include electronics typically found at Best Buy or Circuit City, including wide-screen plasma TVs, digital cameras and surround-sound systems.
And for the first time, it is stocking holiday candles, ornaments, Christmas villages and other home decorations.
"We have more than quadrupled the holiday decor," Bowman said.
The company has made other changes, adding a special holiday page to its Web site at www.homedepot.com that allows customers to order live Fraser firs online and have them shipped free to their homes. And for people who need ideas on how to decorate, the site has a virtual home-decorating tour with tips on how to coordinate trimmings.
Lowe's has responded in kind.
Catalog
For the first time, the company has issued a holiday catalog so customers can order items by phone or online.
"People's lifestyle are busy, and this is an opportunity to reach consumers with added convenience," said Jennifer Wilson, spokeswoman for Lowe's.
The catalog accents home furnishings, as well as gifts with oak mantel clocks, wicker chests, mahogany magazine racks and end tables. Most of these are first-time offers for Lowe's. Many of the items are in the stores, as well.
Lowe's has also started an online gift registry, similar to most bridal registries. You simply create a gift wish list online and then e-mail the link to friends and family. Wilson said that the in-store kiosk for the registry and gift scanner will be installed next year.
Both Wilson and Bowman played down the significance of the housing slump on this year's holiday offerings. The changes are simply an attempt to respond to customers needs, Wilson said.
Whatever the reason, the fight for the nearly 460 billion dollars consumers are expected to spend this holiday season, will likely have one winner, said the retail federation's Krugman: shoppers.
This holiday "is going to be all about the consumer," he said. "They will be able to find what they want at the price they want."