The past year was one of the best his company has seen for the growth of new hardware stores, said House-Hasson Hardware President Don Hasson
The past year was one of the best his company has seen for the growth of new hardware stores, said House-Hasson Hardware President Don Hasson.
He believes a sluggish economy may actually be a big factor in that, as people weigh putting their money into opening a store versus putting it into the financial market.
“We have started this year with a full plate of stores to work on, so I believe it will continue well into the year and maybe beyond,” Hasson said.
In 2011, Knoxville-based hardware distributor House Hasson, which has a division that helps entrepreneurs open or revamp hardware stores, did 15 such projects. In 2012, that number doubled to 30.
“We think it is because investment returns are so low — maybe only one tenth of a percent on money market funds — and interest rates are so low,” he said.
Combine these with a buyer’s market when it comes to commercial properties, and that seems to make owning a store more appealing, Hasson said.
Signs of life in the housing market and increasing consumer confidence also are steering people toward opening hardware stores, he said. The North American Retail Hardware Association, (NRHA) citing U.S. Census Bureau and U.S. Department of Housing and Urban Renewal figures, says that new home sales in August were up 27.7 percent from August 2011.
Whether because people see hardware stores as better investment than financial markets or some other factor, there does seem to be improvement in the retail hardware market.
A year end assessment of the nation’s hardware industry in the December issue of Hardware Retailing magazine notes that overall sales for hardware stores, home centers and lumberyards were $290.3 billion in 2012 compared to $278.3 billion in 2011.
A rise in employment numbers, increase in housing starts and increased consumer confidence were seen as driving factors, the NRHA magazine reported.
The magazine also surveyed 1,000 hardware stores across the country comparing the 2011 and 2010 fiscal years. The sales gap between the most profitable stores and the average stores was only 20 percent in 2011 compared to 56 percent in 2010. This was seen as a sign of improved conditions for the market in general, and that independent stores were finding ways to grow sales.
“People are deciding to be in charge of their own destinies and see this as a better return on their investment than a savings account or the stock market,” Hasson said in a statement.