I was in local Lowes last week, at mid morning, and there were only a handful of customers out numbering the clerks. One observation at one time but amazing none the less.
Few people are going to invest in home improvements when the value of homes is falling. The hardware retailers are in for a couple of years of flat or falling sales.
Friend of mine in Pensacola sells on contract for one of the mainline AC companies. He said it has been dead for weeks now, maybe months. Hard to tell with him. His time distance factor being screwed up with age and pharmaceuticals.
One score and seven years ago [ that's 27 years ago for the math challenged ] our fathers brought forth on this continent, a new means of financing, conceived in profitability, and dedicated to the proposition that everyone will make money and the only question was how much.
Now we are engaged in a great civil war, testing whether that means of financing, or any bubble so conceived and so dedicated, can long endure. We are met on a great battle-field of that war.
{hint: that's when our dollar was moved off the gold standard}
Friday Home Depot buying fiberglass insulation, Not only light traffic but the "carts" ere all commodity items; lumber, electrical, etc. And that is the real story. Paid $66 for my batting that last year cost ~$40. Don't even try to do year over year comparisons for Romex. To show steady same store sales the HIs would need to show substantial double digit revenue increases to account for materials cost increases.
On Aug. 10, 2005, when Greenspan was chairman, 94 percent of the Fed's $24 billion in outstanding repurchase agreements with Wall Street were in U.S. Treasury notes. On Aug. 10, 2008, only 14 percent were in Treasuries, with the rest in mortgage bonds and agency securities, according to Wrightson ICAP LLC in Jersey City, New Jersey.
We need a new bubble, and we need it now. Bubbles might be bad long term, but right now we're on life support and need the oxygen. Wage inflation will get housing "reasonable"--there's no other way out. When wages are kept constant, or decline, eventually the reaper cleans up.
I have a Super Walmart, Lowes and Home Depot all within 5 miles of my house. Walmart is always packed, Lowes and HD are nice and quiet.
I try to get most everything at Walmart and don't bother to check prices. If Walmart does not carry it, then I hit HD followed by LOW, but I do check prices.
They are all big box stores so it is not a big box problem. When times get bad, Chinese stuff rules.
The meta implications for housing are fascinating. In the boom all the old rules of improvement were ignored. Major kitchen or new bath 0.8 ROI. Pools, as little as 25¢ on the dollar returns. The housing pustule fooled people, especially flippers into thinking every over improvement was really a sure fire investment. Now comes the flip side. As mentioned in the comments no one will invest beyond basic habitability needs for a very long time. This will also accelerate price declines as substitution will occur in those houses that are selling. Back to the HIs; the nature of the few remaining improvements means a vicious shift away from th highly profitable items like appliances, design services, et al. Next to fall, consumer durables. $It appears that GE mde its first good corporate decision since Welch when it got out of the appliance biz. The did gt out in time? Ruh roh.
We need a new bubble, and we need it now. Bubbles might be bad long term, but right now we're on life support and need the oxygen.
This is correct. Anybody who's foolish enough to be worried about the "long term" just hates America and wants people to suffer. It's as simple as that.
Increases in the price of oil, price of food, levels of debt, numbers of bankruptcies: These are all acceptable. Increases in wages, on the other hand, are the one variety that the PTB will not tolerate.
If greater wages are the only thing that will save us, the PTB would much rather not.
Which is considered the better run chain - Lowes or Home Despot? I forget.
Depends on your POV - I know mfgrs who sell to both, they MUCH prefer Lowes over HD (just as tough a sell but aren't assholes about it)... sort of like comparing Target & WalMart... I talked to folks who supply both of them as well, same story (WalMart buyers get beat up so bad by their own mgmt they relish dishing it out on suppliers, make the F'ers pay).
As far as customer perspectives? I can't speak - they look/feel the same to me just a different color McUniform.
Guess it depends on what you are looking at. Nardelli refused to upgrade many HD's during his control while Lowe's steamed full speed ahead on upgrades and "fluffy" things. It all depends on how all those upgrades at Lowe's were financed. If the business is tanking then it doesn't matter how shiny the turd is if you still can't produce revs.
BTW the Monterey Historics "weekend" has been greatly affected by the current problems in the market. I'll post more about it later.....
BTW the Monterey Historics "weekend" has been greatly affected by the current problems in the market. I'll post more about it later..... MS
My BIL was there press covering for a major brand name and says the same thing. All look, no touch.
The hit rate on the auctions in downtown Monterey (at least on friday night) was about 20-25%.....unheard of. Even many european buyers were not buying. Example: a big block 69 Vette (427) coouldn't get over $50k. That same car (the exact same one) sold at the January Barret auction for almost 120K in 2006- I know the seller who sold it in '06.
MS,
The old Wall Street joke applies. "Son those aren't drivin' cars, those are tradin' cars." The people interested in owning for the joy and rolling statement have long since left the markets to the big dollar buy/trade crowd. That and to be honest the driving enthusiasts have S2000s and such for 1/5th the price and insurable besides.
Home Depot and Lowes might want to pay attention to what Linens 'n Debt say they plan to do to make their comeback.
It also will focus on improving the quality of its merchandise and keeping shelves stocked in timely fashion, the paper said.
Home Depot currently has a shelf stocking problem in my neck of the woods. If you can't keep basic drywall materials in stock, you aren't going to succeed in that business. I predict some store closings in the near future.
"The old Wall Street joke applies. "Son those aren't drivin' cars, those are tradin' cars." The people interested in owning for the joy and rolling statement have long since left the markets to the big dollar buy/trade crowd."
Over the last couple of years I've cashed in what few high-dollar collectibles I have left that I don't actually want to keep for their own sake. The tighter money gets, the lower most collectible prices will fall. And some of them will never come back.
Collectibles are sort of the "hobby bubble" market of the late 20th century. The Beanie Baby Bubble was only the most noticeable and ludicrous of them.
I believe that most of the decrease in y/y same store sales is just the result of there being more stores opened in an already saturated market, thus canablisizing sales from other stores. I have observed this first hand in my market. Of course I also observe that this opinion/observation doesn't fit in with 'the world coming to an end' view of most of the posters on this board.
That YoY obaservation on commodity item price increases is acute - what would the decline be if the physical volume sold were normalized to last year prices?
I just got back from Lowes with my new freezer. My old one is full of limb chicken and salted squirrel tails...
"It was such a staple of rural diets that squirrels earned the nickname 'limb chicken.'"
"Place the cleaned carcasses in a clean plastic bread wrapper or plastic grocery bag, twist the bag closed and store in a cool place until you can freeze or cook the meat.
Save the squirrel tails, salt the butt ends, and freeze them flat. Mepps, in Antigo, Wis., is a large Wisconsin producer of fishing lures and they buy squirrel tails for 16-26 cents each to dress the hooks of their spinners. Company researchers have tested hundreds of other materials, both natural and synthetic, and have found nothing comparable to the natural tail hairs of tree squirrels for use on the famous Mepps spinners."
re: Lowes vs Home Depot. As a former Hopeless Despot associate let me state that I ALWAYS spend my home improvement/hardware $$$ at Lowes whenever possible regardless of price.
This is correct. Anybody who's foolish enough to be worried about the "long term" just hates America and wants people to suffer. It's as simple as that.
"Long run is a misleading guide to current affairs. In the long run we are all dead."
This is occuring throughout retail as WMT and others are gaining share of a shrinking pie.
In addition to being downright evil Walmart is in fer a whoopin' because its business model broke this year. Cheap transportation and municipal "assistance" for but two legs on their stool are gone, not wobbly, gone. Another leg of their stool, how about cheap goods from China? Oooops. How's that workin' fer ya Ghost of Sam? I can see it in their pricing structure of different goods segments. DVDs cost 4¢-10¢ to manufacture. Rights/distribution for places like Walmart are a buck or two or three maybe. These have room for using price points to draw and they are. Bins in the aisle full of second rate movies $4 and $5 each. But, slide on over to spark plugs or light bulbs and there is no margin left to cut. Those are little items. Last year big mold blown plastic toys (kiddie teahouses or forts) were inexpensive. This year, let's see; Chinese wage inflation, oil product materials input, transportation, handling. All saw monster price inflation. Christmas this year may not be an orange and new sneakers but it sure ain't gonna be like 2002 either.
Two final points on the evil octopuses' tentacles getting chopped off. They bought a whole lotta CRE for themselves and as anchor (them) adjacent investment in the boom years. Those two don't look so hot going forward. Lastly, is the most important but least quantifiable. Their business model generally relies on externalizing costs and internalizing control. For decades they've been clearcutting and strip mining supplier expertise for uncompensated export to "other" unnamed countries with fewer restrictions on things like human rights and pollution controls. Dryfly can probably speak more to the issue but American businesses are wising up to this transfer of expertise and its true costs.
I was in a Lowe's yeaterday afternoon about 2:30. It seemed moderately busy. Had to wait five minutes to get a key made. Cost $1.59. That should help their bottom line.
First?
I was in local Lowes last week, at mid morning, and there were only a handful of customers out numbering the clerks. One observation at one time but amazing none the less.
I buy my supplies from both Homedepot and Lowes, both way down on traffic and vacant at 7am. NO LINES,, woohoo
No question, when you go to a Lowes or HD on Saturday afternoon and it looks like a Sears or Kmart, you know things are slow.
Few people are going to invest in home improvements when the value of homes is falling. The hardware retailers are in for a couple of years of flat or falling sales.
Friend of mine in Pensacola sells on contract for one of the mainline AC companies. He said it has been dead for weeks now, maybe months. Hard to tell with him. His time distance factor being screwed up with age and pharmaceuticals.
repost with minor changes from a prior thread:
One score and seven years ago [ that's 27 years ago for the math challenged ] our fathers brought forth on this continent, a new means of financing, conceived in profitability, and dedicated to the proposition that everyone will make money and the only question was how much.
Now we are engaged in a great civil war, testing whether that means of financing, or any bubble so conceived and so dedicated, can long endure. We are met on a great battle-field of that war.
{hint: that's when our dollar was moved off the gold standard}
Friday Home Depot buying fiberglass insulation, Not only light traffic but the "carts" ere all commodity items; lumber, electrical, etc. And that is the real story. Paid $66 for my batting that last year cost ~$40. Don't even try to do year over year comparisons for Romex. To show steady same store sales the HIs would need to show substantial double digit revenue increases to account for materials cost increases.
Another repost to put my last comment in focus:
Bloomberg.com refer=home
On Aug. 10, 2005, when Greenspan was chairman, 94 percent of the Fed's $24 billion in outstanding repurchase agreements with Wall Street were in U.S. Treasury notes. On Aug. 10, 2008, only 14 percent were in Treasuries, with the rest in mortgage bonds and agency securities, according to Wrightson ICAP LLC in Jersey City, New Jersey.
We need a new bubble, and we need it now. Bubbles might be bad long term, but right now we're on life support and need the oxygen. Wage inflation will get housing "reasonable"--there's no other way out. When wages are kept constant, or decline, eventually the reaper cleans up.
Which is considered the better run chain - Lowes or Home Despot? I forget.
I have a Super Walmart, Lowes and Home Depot all within 5 miles of my house. Walmart is always packed, Lowes and HD are nice and quiet.
I try to get most everything at Walmart and don't bother to check prices. If Walmart does not carry it, then I hit HD followed by LOW, but I do check prices.
They are all big box stores so it is not a big box problem. When times get bad, Chinese stuff rules.
The meta implications for housing are fascinating. In the boom all the old rules of improvement were ignored. Major kitchen or new bath 0.8 ROI. Pools, as little as 25¢ on the dollar returns. The housing pustule fooled people, especially flippers into thinking every over improvement was really a sure fire investment. Now comes the flip side. As mentioned in the comments no one will invest beyond basic habitability needs for a very long time. This will also accelerate price declines as substitution will occur in those houses that are selling. Back to the HIs; the nature of the few remaining improvements means a vicious shift away from th highly profitable items like appliances, design services, et al. Next to fall, consumer durables. $It appears that GE mde its first good corporate decision since Welch when it got out of the appliance biz. The did gt out in time? Ruh roh.
We need a new bubble, and we need it now. Bubbles might be bad long term, but right now we're on life support and need the oxygen.
This is correct. Anybody who's foolish enough to be worried about the "long term" just hates America and wants people to suffer. It's as simple as that.
CNBC just mentioned that the one item still selling well at Lowe's were 'Freezers'. Gee, I wonder why..
Mel,
Increases in the price of oil, price of food, levels of debt, numbers of bankruptcies: These are all acceptable. Increases in wages, on the other hand, are the one variety that the PTB will not tolerate.
If greater wages are the only thing that will save us, the PTB would much rather not.
Gavshire,
Anybody mentions squirrel and I'm l am blaming you.
Which is considered the better run chain - Lowes or Home Despot? I forget.
Depends on your POV - I know mfgrs who sell to both, they MUCH prefer Lowes over HD (just as tough a sell but aren't assholes about it)... sort of like comparing Target & WalMart... I talked to folks who supply both of them as well, same story (WalMart buyers get beat up so bad by their own mgmt they relish dishing it out on suppliers, make the F'ers pay).
As far as customer perspectives? I can't speak - they look/feel the same to me just a different color McUniform.
re: Lowes vs HD..
Guess it depends on what you are looking at. Nardelli refused to upgrade many HD's during his control while Lowe's steamed full speed ahead on upgrades and "fluffy" things. It all depends on how all those upgrades at Lowe's were financed. If the business is tanking then it doesn't matter how shiny the turd is if you still can't produce revs.
BTW the Monterey Historics "weekend" has been greatly affected by the current problems in the market. I'll post more about it later.....
Ciao
MS
BTW the Monterey Historics "weekend" has been greatly affected by the current problems in the market. I'll post more about it later..... MS
My BIL was there press covering for a major brand name and says the same thing. All look, no touch.
Rob-
The hit rate on the auctions in downtown Monterey (at least on friday night) was about 20-25%.....unheard of. Even many european buyers were not buying. Example: a big block 69 Vette (427) coouldn't get over $50k. That same car (the exact same one) sold at the January Barret auction for almost 120K in 2006- I know the seller who sold it in '06.
Pure carnage....
Ciao
MS
MS,
The old Wall Street joke applies. "Son those aren't drivin' cars, those are tradin' cars." The people interested in owning for the joy and rolling statement have long since left the markets to the big dollar buy/trade crowd. That and to be honest the driving enthusiasts have S2000s and such for 1/5th the price and insurable besides.
Home Depot and Lowes might want to pay attention to what Linens 'n Debt say they plan to do to make their comeback.
It also will focus on improving the quality of its merchandise and keeping shelves stocked in timely fashion, the paper said.
Home Depot currently has a shelf stocking problem in my neck of the woods. If you can't keep basic drywall materials in stock, you aren't going to succeed in that business. I predict some store closings in the near future.
Rob-
Actually that particular car was a "driver". It had some "issues" and my colleague laughed all the way to the bank with the check.
But yes you're classification of what they truly are is correct for the most part.
The real tell will be the hit rate in January's coming auction in Phoenix. Betcha they bring back reserves....
They will have to.
Ciao
MS
"The old Wall Street joke applies. "Son those aren't drivin' cars, those are tradin' cars." The people interested in owning for the joy and rolling statement have long since left the markets to the big dollar buy/trade crowd."
Over the last couple of years I've cashed in what few high-dollar collectibles I have left that I don't actually want to keep for their own sake. The tighter money gets, the lower most collectible prices will fall. And some of them will never come back.
Collectibles are sort of the "hobby bubble" market of the late 20th century. The Beanie Baby Bubble was only the most noticeable and ludicrous of them.
I believe that most of the decrease in y/y same store sales is just the result of there being more stores opened in an already saturated market, thus canablisizing sales from other stores. I have observed this first hand in my market. Of course I also observe that this opinion/observation doesn't fit in with 'the world coming to an end' view of most of the posters on this board.
Dawg,
That YoY obaservation on commodity item price increases is acute - what would the decline be if the physical volume sold were normalized to last year prices?
(tag used - yikes!)
Did somebody mention squirrels?
I just got back from Lowes with my new freezer. My old one is full of limb chicken and salted squirrel tails...
"It was such a staple of rural diets that squirrels earned the nickname 'limb chicken.'"
"Place the cleaned carcasses in a clean plastic bread wrapper or plastic grocery bag, twist the bag closed and store in a cool place until you can freeze or cook the meat.
Save the squirrel tails, salt the butt ends, and freeze them flat. Mepps, in Antigo, Wis., is a large Wisconsin producer of fishing lures and they buy squirrel tails for 16-26 cents each to dress the hooks of their spinners. Company researchers have tested hundreds of other materials, both natural and synthetic, and have found nothing comparable to the natural tail hairs of tree squirrels for use on the famous Mepps spinners."
Page Not Found - WDNR
re: Lowes vs Home Depot. As a former Hopeless Despot associate let me state that I ALWAYS spend my home improvement/hardware $$$ at Lowes whenever possible regardless of price.
@ 9:58, AC wrote:
This is correct. Anybody who's foolish enough to be worried about the "long term" just hates America and wants people to suffer. It's as simple as that.
"Long run is a misleading guide to current affairs. In the long run we are all dead."
A Tract on Monetary Affairs, 1923
--JM Keynes--
to add to the Home depot string here...
I'm doing a re-carpet (whole house) and the ONLY reason I'm using them is that they offer 12 month no finance charge.
That will be going away very shortly...
Do I want to deal with them?? Hell no however I'll use their money for my advantage.
The "other" side of zero percent will kill them later next year.
Ciao
MS
On conf call LOW CFO said the monthly progression for Q2 comps was worst in july.
Remember that LOW comps also benefit from inflation in the cost of lumber and copper. This will change.
2 things caught my attention this morn.
This is occuring throughout retail as WMT and others are gaining share of a shrinking pie.
This is occuring throughout retail as WMT and others are gaining share of a shrinking pie.
In addition to being downright evil Walmart is in fer a whoopin' because its business model broke this year. Cheap transportation and municipal "assistance" for but two legs on their stool are gone, not wobbly, gone. Another leg of their stool, how about cheap goods from China? Oooops. How's that workin' fer ya Ghost of Sam? I can see it in their pricing structure of different goods segments. DVDs cost 4¢-10¢ to manufacture. Rights/distribution for places like Walmart are a buck or two or three maybe. These have room for using price points to draw and they are. Bins in the aisle full of second rate movies $4 and $5 each. But, slide on over to spark plugs or light bulbs and there is no margin left to cut. Those are little items. Last year big mold blown plastic toys (kiddie teahouses or forts) were inexpensive. This year, let's see; Chinese wage inflation, oil product materials input, transportation, handling. All saw monster price inflation. Christmas this year may not be an orange and new sneakers but it sure ain't gonna be like 2002 either.
Two final points on the evil octopuses' tentacles getting chopped off. They bought a whole lotta CRE for themselves and as anchor (them) adjacent investment in the boom years. Those two don't look so hot going forward. Lastly, is the most important but least quantifiable. Their business model generally relies on externalizing costs and internalizing control. For decades they've been clearcutting and strip mining supplier expertise for uncompensated export to "other" unnamed countries with fewer restrictions on things like human rights and pollution controls. Dryfly can probably speak more to the issue but American businesses are wising up to this transfer of expertise and its true costs.
I was in a Lowe's yeaterday afternoon about 2:30. It seemed moderately busy. Had to wait five minutes to get a key made. Cost $1.59. That should help their bottom line.