Bob Gordman: Lowe’s impact underestimated
The Gordman Group, Breckenridge
Since my consulting group has done a number of projects for national and regional retailers impacted by big box stores, I was surprised by the conclusions reached by DSR Marketing Systems related to Lowe’s entering Silverthorne and Summit County. Our work has been related to helping retailers compete once these stores have entered the market rather than a theoretical estimate of the effect they would have on existing stores.
In our experience, the impact of Lowe’s and Home Depot is dramatically greater than DSR has estimated. Specifically in the garden center business, our experience has shown that in numerous cases these big box retailers will take close to 50 percent market share in the neighborhoods they enter.
Resort communities are unique in their retail behavior and research methodologies utilized in more typical suburban communities are not very relevant. In addition, the use of 2007 data does not seem to be a solid choice for a sales baseline.
I also thought it was interesting that Lowe’s would select a supplier to develop this forecast whose primary experience is from outside the United States and in the grocery industry.
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